Optimization is the Key to Reducing Vehicle Fleet Costs.
Organizations are faced with the reality of doing more with less. Executive management regularly asks the fleet manager – “can you reduce fleet costs?” The answer is yes. Optimize your fleet with BISHOP Fleet Optimization. You can do more with fewer vehicles when you understand what the fleet costs are and how the vehicles are being used.
Reduce 
Vehicle 
Optimize Reduce fleet costs
How to Reduce Vehicle Ownership Costs
FIXED vehicle costs can total 70%-80% of vehicle ownership costs in the first 3 years of ownership. Fixed costs are incurred whether you own or lease the vehicle so you pay either way.
Vehicle FIXED costs
- Depreciation [50%]
- Interest/Finance Charges [19%]
- Insurance [6%]
- Repairs & Maintenance [6%] and
- Vehicle Registration and Inspections [3%]
Key Points
- Removing surplus vehicles [i.e. downsizing] is the number one way to lower your fleet costs.
- FIXED vehicle outlays add up to 70%-80% of vehicle ownership costs.
- Every surplus vehicle costs money whether it is used or not.
Steps that fleet managers can take to reduce fleet costs are listed below.
- Downsize to remove surplus vehicles. Contact BFO to do a vehicle utilization audit. The BFO concurrent vehicle usage analysis will accurately identify your surplus fleet vehicles.
- Audit fleet vehicle numbers BEFORE procuring new fleet vehicles so you do not replace surplus vehicles.
- Optimize trip routes and plan ahead so multiple trips aggregate into one.
- Identify and remove service area overlaps.
- Right-size so the optimal sized vehicle is used for a job.
- Determine if a meeting can be done by phone or online.
- Keep vehicle maintenance up-to-date.
- Curb poor driver behavior if identified.
How to Calculate a Fleet Vehicle Cost
Costs for the first 3-years of ownership for a 1.3-2.0L vehicle are listed in the table below.
Work done by the surplus vehicles will still be done by other vehicles. The variable costs such as fuel and tires will be passed on to the rest of the fleet, but overall a 84% saving per vehicle can be made.
| Cost Item | Fixed or Variable Cost | Percentage of Vehicle Cost |
|---|---|---|
| Depreciation | Fixed | 50% |
| Interest/Capital Charges | Fixed | 19% |
| Fuel | Variable | 13% |
| Repairs and Maintenance | Fixed/Variable | 6% |
| Insurance | Fixed | 6% |
| Tires | Variable | 3% |
| Registration, Inspections and other certification | Fixed | 3% |
| TOTAL | 100% |
* Cost items percentages may slightly differ by fleet.
