Fleet management is a growing business: Berg Insight suggest that the number of fleets deployed in Europe will grow from 1.5m units in 2009 to 4m in 2014. Due to the scale of fleets, marginal gains can often result in significant cost savings for businesses. And the latest developments in the industry, such as cloud-based centralised management software, are ramping up the savings available as well as providing a lower point-of-entry.
Ensure your cars fall below 130g/km
Since April 2009, writing down allowance – a statutory depreciation deduction – is linked to a vehicle’s CO2 emissions, which means greener cars attract a more lucrative rate. In 2013 the system was changed slightly and 130g/km emerged as the key ceiling for cost-effective fleet management. Cars with emissions between 96g/km and 130g/kg attract an allowance of 18%, while those with emissions of 131g/km and higher attract an 8% allowance.
Electric cars and vehicles with emissions of lower than 95g/km attract 100% statutory depreciation deduction for the first year. Companies that lease cars rather than buy them can deduct 100% of the car’s cost against taxable profits – this falls to 85% for cars with emissions above 130g/km.
Control your mileage
Mileage isn’t a fixed cost – it’s a controllable cost that, across a large fleet, can have significant effect on overall cost. And with fuel contributing between 20% and 30% of a vehicle’s whole life costs, there are big savings to be made by tightly controlling fuel budgets.
Companies should track both the distance covered in cars and also the fuel used – these two metrics can build up a more accurate picture than just one alone. By analysing this data, efficient and inefficient driving can be identified and training provided to maximise ROI from fuel.
Accurately-recorded mileage is also important to protect against fraudulent claims and also ensure the business is compliant with HMRC expectations.
Strong end-of-contract terms for drivers
It’s important that drivers treat your feet cars with the same respect as they would your own – any problems will need to be rectified and this could cost you significantly at the end of the car’s life. End-of-term contracts often include terms that people define differently, such as ‘wear-and-tear,’ and sometimes companies can be hit with higher fees based on a provider’s definition. Employees should be trained in what the terms mean for them and their use of the vehicle.
As companies switch to longer refurbishment cycles to cut costs, they often experience higher end-of-contract charges per vehicle and thus maintaining tighter control of employee use is becoming more important.
You may also want to incentivise and reward drivers for positive behaviours to encourage them to treat your cars with respect. These could be linked to metrics established at end-of-contract e.g. state of vehicle, state of engine etc.
Regular vehicle inspection reports
Keeping track of vehicle condition helps for two reasons: it gives a strong audit trail which helps protect the company in the case of disputes and also helps flag up potential issues before they turn into bigger problems. Involving employees in the process also helps them understand the responsibilities you have towards maintenance of the fleet and you can reiterate their own responsibilities as you run through the process. If employees are unsure, you should provide them with training so they are confident in basic maintenance.
Centralise your fleet management software
The fleet management software market is mature and there are advanced solutions on the market that sit as a centralised point of contact for all other important data flows, such as information from your fuel card company. You may also be able to integrate the central software with route planning functionality, allowing you to monitor routes chosen by drivers and maximise fuel and time efficiencies, all from your office. Also, more and more fleet management software is delivered as a service via the cloud, making cost of entry much lower.
About Jamie Lawrence
Jamie Lawrence is editor of global online HR publication and community HRZone.com. He is committed to driving forward the HR agenda and making sure that HR directors have the knowledge and insight necessary to make HR felt across the whole organisation. He regularly speaks to audiences of 250+ and has interviewed key HR industry names, including Daniel H. Pink. He has worked previously as a small business journalist and a copywriter and has published non-fiction that reached #2 on the NYT Children's Bestseller List. In his spare time Jamie likes writing fiction, films, fitness and eating out.