5 Ways to Reduce Fleet Costs
How to Reduce Fleet Costs
Do you track fleet total cost of ownership? Calculating fleet TCO is an extremely valuable practice. It can help you evaluate the actual cost of owning your fleet and assist you in determining ways to reduce fleet costs.
Want to know more about how to accurately estimate fleet TCO? Check out Fleet Total Cost of Ownership.
As a fleet owner or manager, you can use accurate total cost of ownership figures to uncover areas of improvement. Above all, the key to reducing fleet operating costs is acquiring the right vehicles.
To help you get started, here are the five best ways to reduce fleet costs.
1. Green and Hybrid Fleets
Acquiring eco-friendly fleet vehicles is one of the best ways to reduce fleet operating expenses.
Green and hybrid fleet vehicles, like the Kia Niro EV, reduce day-to-day operating expenses. Most significantly, hybrid and EV fleets reduce the cost of fuel.
If you track total cost of ownership, you’ll know exactly how much your fleet spends on fuel. However, on average, fuel costs account for up to 60% of a fleet’s operating expenses! Therefore, the ability to decrease, or eliminate, the need for fuel can greatly reduce total operating costs.
In addition, many green vehicles offer government rebates. With the ability to receive up to ten government-funded rebates each year, fleet managers can secure huge savings on fleet acquisition costs.
2. Vehicles with Lower Insurance Premiums
Insurance is another significant cost. However, some vehicles attract higher insurance premiums than others.
The following factors can impact insurance premiums:
- Vehicle features
Why do these aspects affect fleet insurance?
Insurance companies use this information to determine the average cost to repair a vehicle and the likelihood of it being in an accident. Vehicles that are less expensive to repair, and less likely to get in an accident in the first place, will attract lower premiums.
3. Vehicles with Longer Maintenance Intervals
Acquiring fleet vehicles that require less maintenance can help reduce fleet costs in a number of ways.
First and foremost, longer maintenance intervals mean less upkeep and repair expenses.
Less maintenance also means less downtime. Downtime is an often forgotten aspect of TCO but one that can have a significant impact on the success of a fleet. Essentially, downtime equates to opportunity cost or the productivity, benefits, and revenue that is lost when a vehicle is not in operation. Vehicles that offer longer maintenance intervals will be on the road more often. This allows for increased productivity and revenue.
Keep in mind, even with vehicles that have longer maintenance intervals, preventative maintenance is still important. Preventative maintenance helps to reduce downtime and minimize overall maintenance costs in the long run.
4. GPS Tracking and Automated Fleet Management Tools
Fleet GPS tracking and the use of automated fleet management tools can also help reduce fleet costs.
Fleet GPS installs provide the ability to review driving data (e.g. location, speed, idling status), and warn of potential maintenance issues. This information can help fleet managers reduce numerous costs. In fact, according to a Fleet Technology Trends Survey conducted by Verizon Connect, GPS fleet tracking technology can help decrease fuel costs by approximately 8%, costs related to accidents by 11%, and labour costs by 10%.
Automated fleet management tools help fleet managers track and record operating expenses. Automated tools will help calculate a more accurate TCO and even assist in optimizing fleet total cost of ownership. Accurate reporting and historic and real-time analytics allow fleet managers to reduce costs like fuel usage and improve operations. As well, automated tools reduce labour costs by assisting administration and fleet managers.
5. Replacing Fleet Vehicles
Age and mileage have a considerable impact on the cost to operate a fleet vehicle. At a certain point, it will cost more to run the vehicle than the value it adds to the fleet. Therefore, fleet managers must recognize when it is time to replace a vehicle.
Replacing vehicles before they get too old will help minimize TCO by decreasing maintenance requirements and downtime, and maximizing productivity. If a vehicle is owned, replacing it before it has too many kilometres can also result in a higher resale value.
There are several ways to determine when fleet vehicles should be replaced. However, the most important thing to do is accurately track total cost of ownership so that trends in age, kilometres and costs can be examined over time.
How a Kia Fleet Can Help Reduce Fleet Costs
At Kia Fleet, we believe in mobility for all. We also recognize the importance of minimizing fleet total cost of ownership. As a result, Kia is focused on providing fleet managers and owners with the best value - so more businesses can go further!
Our focus on environmental sustainability means we offer some of the most dependable EVs on the market. Choose from our selection of electric and hybrid fleet vehicles to help reduce your day-to-day operating expenses like fuel. If you go with a fleet of EV or hybrid vehicles, our team will help you find all applicable government rebates.
Not ready to make the move to electric?
Kia’s gas-powered business car fleets offer exceptional fuel economy so you can reduce fuel costs even without making the switch to EVs.
In addition to being reliable and cost-effective, Kia Fleet vehicles attract some of the lowest insurance premiums available. Whether you go with a car, SUV or cargo minivan, you can expect to receive some of the best premiums on the market.
Kia Fleet vehicles also have minimal maintenance requirements. This means your fleet vehicles will be on the road more often for maximum productivity. As an added bonus, all of our fleet vehicles come with a comprehensive warranty. As a result, you can further save on maintenance and repair costs.
Looking to reduce fleet costs with the help of technology?
Kia Fleets come equipped with UVO IntelligenceTM Telematics. This technology will provide your company with safety and security features, as well as vehicle diagnostics. As a result, you’ll be able to reduce costs related to accidents, theft and misuse.
Need help or have questions? Your Kia Fleet team is just a call away! All fleets come with a dedicated support team ready to help with whatever you need.
Reduce Fleet Costs Today
Whether you’re ready to work with Kia Fleet or just have questions, our fleet experts can help!
Our team will assist you with planning your fleet purchase and offer advice for minimizing fleet costs. Once you’re ready to move forward, we’ll help you with purchasing and maintaining your fleet for maximum profitability and minimum total cost of ownership.
Schedule your consultation today!