How to Maintain Fleet Vehicles in Light of Rising Costs?

Rising prices can increase the pressure on fleet managers to efficiently juggle expenses. Learn how to maintain fleet vehicles in light of rising costs.

Running a successful fleet management business requires you to be on your toes to maintain the efficiency of your fleet vehicles. Amid the rising costs, this becomes a challenge. This article will focus on the challenges fleet managers face while maintaining fleet vehicles in light of rising costs and the role of software to ensure smooth operations.

Before we dive deeper, let’s start by knowing a bit about fleet costs. 

What Are Fleet Costs?

Fleet costs are a sum of total ownership costs and the expenses incurred in fleet operations. Evaluating fleet costs involves taking into account several key factors, including asset acquisition, licensing, maintenance costs, labour, disposal cost of assets and other operational expenses.

How Are Fleet Costs Calculated?

As mentioned earlier, fleet costs include the total cost of ownership (TCO) plus fleet operations cost, what are the other variables involved? Let’s start by knowing the method for calculating the fleet costs first. 

TCO includes the following elements;

• Initial vehicle acquisition cost
• The selling price of the vehicle when disposed
• The costs of the vehicle between its acquisition and selling

TCO = (Acquisition Cost + Interest + Vehicle Running Costs – Resale Cost)/Total mileage

After calculating TCO, the next step involves calculating the operational costs for the fleet. This cost typically involves two components; fixed and variable costs. 

• Fixed costs: This involves long-term costs which are generally the same throughout the year such as licenses, labor charges and lease payments.

• Variable costs: These would typically include unexpected expenses such as; maintenance costs, toll tax, shifting gas prices, additional costs due to idling and speeding, rash driving behaviours resulting in unplanned maintenance expenses, rapid acceleration and heavy braking leading to reduced fuel economy.

How To Manage Fleet Costs?

According to the expert predictions depicted in Global Fleet Management, it has been estimated that fleet costs are only expected to rise in the coming years. Some of the major factors responsible for this surge are rising vehicle acquisition costs, increasing fuel prices, maintenance costs, and insurance expenditures. So, how do fleet managers ensure the sustainability of their business?

How to Maintain Fleet Vehicles Amid Rising Costs?

Here are the top ways in which telematics solutions can help you reduce the overall fleet costs, maximize efficiency and streamline your operations;

• Utilizing fleet telematics data to analyse business costs 

As a part of the standard operations of every fleet business, an estimated fleet budget is calculated at the beginning of fleet operations. Fleet Management Software can help you streamline this process. 

How? When you connect your vehicle’s data to the software, you can use this data to calculate the actual operating costs and compare them to your fleet budget. Besides this, telematics devices collect several types of data including speed, vehicle location, fuel consumption, driver behaviour and more. 

This comparison will help you determine the areas where you can effectively reduce costs and enhance overall productivity. 

• Schedule Vehicle Maintenance/ Repairs 

Maintenance/ repairs cover a large part of fleet costs. Unexpected vehicle breakdowns can put extra pressure on fleet managers. This leads to disruption in the fleet budget and additional expenses. 

By using fleet telematics data, they can easily overcome this problem. How? With the help of this data, managers can identify the maintenance needs of their vehicles by picking up the actual odometer reading. Through this reading, they can know how much distance the vehicle has travelled in a time frame and schedule maintenance schedules based on time or distance intervals. 

Also, besides this fleet managers can use fleet management software to set up service/ maintenance reminders at a particular time frame. These reminders will keep them updated and save their vehicle from unexpected breakdowns and delayed deliveries. 

• Reduce Your Insurance Premium Costs

An insurance premium refers to the amount of money a fleet management organization pays to an insurance provider in exchange for insurance coverage for their fleet of vehicles. Using telematics solutions, fleet managers can reduce these costs. How? 

It’s pretty simple, telematics offers insights into on and off-road operations. It helps fleet managers keep a close tab on driving performance, maintenance schedules and other insights. This data will help them prove their driver’s innocence in case of a road tragedy, and strengthen their case for insurance claim. 

Also, telematics solutions can minimise accident rates by allowing managers to offer proper training and feedback to their drivers. Once this rate gets reduced, fleet managers can negotiate the premium expenses.

• Track Fuel Efficiency

Fuel consumption is already one of the major expenses in fleet management and drivers indulging in idling only contribute to a rapid increase in engine hours, resulting in surging fuel costs. 

Fleet telematics solutions help fleet managers get real-time fuel consumption updates with respect to the distance and speed of the vehicle. They can review fuel usage, and consumption trends, fill and drainage reports, and assess how efficiently each vehicle is using fuel.

How Fleet Telematics Can Help Managers Sustain Fleet Growth Amid the Rising Costs?

At the end of the day, every fleet business owner looks for a way to reduce operational costs, increase efficiency and maintain the vehicle’s health. This article was just a trailer of how Fleet Management Software can help fleet managers maintain Fleet vehicles amid rising costs.

To know about the whole picture, schedule a demo with TrackoBit today!