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A common question asked by fleet managers is how can they reduce their fleet costs. While there are many factors that fleet managers can’t control, there are several ways they can reduce fleet costs whilst also encouraging better driving standards. 


How are fleet insurance costs calculated?


Each insurer will calculate their premiums to their own criteria, and things affecting this could include group strategic objectives such as recovering previous losses and writing business for profit. However, that being said, there are certain factors that fleet insurance providers will look at to establish the cost of your fleet. 


These factors include:


  • The number and age of your drivers
  • The type of vehicles that you own 
  • The cost of acquisition for your vehicles 
  • The locations you work at and how far you travel 
  • The maintenance cost of your vehicles 
  • The type of cover you have and the excess you pay 
  • The security of your vehicles


Why is fleet insurance so expensive?


The cost of insurance premiums has risen in recent years, and fleet insurance is no exception. Vehicles have become more complicated to repair and the price of parts has increased for a number of reasons. As such fleet operators are bearing the brunt with increasing premiums. 


There are a few factors however, that will influence how expensive your fleet insurance is, including your claims history, your risk management procedures and your trade.


What are the fixed costs in fleet management?


Fixed costs, sometimes known as capital expenses, are the same no matter how much a company makes or their financial position changes. Fixed costs are predictable and can help businesses to budget better. Some fixed costs include:


  • Taxes
  • Insurance
  • Licences
  • Loan and leases

The best ways to reduce fleet costs


There are a few ways you can reduce your fleet costs while in turn also helping to increase your fleet efficiency. 


1.Monitor your driver’s behaviours

Bad driving habits can lead to excessive fuel consumption and general vehicle degradation. Speeding, inappropriate gear shifting and aggressive braking will all contribute to fuel waste. This is why monitoring driver behaviour is essential. 


With an integrated fleet management system, fleet managers can assess patterns in driver behaviour and provide actionable feedback to their drivers.

2. Optimise your route planning 


Higher mileage will equate to higher fuel costs, and drivers can unknowingly drive unnecessary miles by going longer routes. As a fleet manager, you can use digital tools such as telematics to analyse busy routes and give on-road support to drivers so they can avoid these congested areas. 

Optimised route planning enables you to be more productive, leading to greater satisfaction amongst your drivers and clients. 

3. Schedule preventative maintenance

It’s no secret that properly maintained vehicles last longer and use fuel much more efficiently. Maintenance issues that go unnoticed or are put off can eventually result in breakdowns and high repair costs. By regularly scheduling preventative maintenance, you can help to put a stop to productivity losses.

Downtime from incidents or unexpected repairs can cause delays, and should an incident be caused by a poorly maintained vehicle, your business would be liable for any material damage or loss of life.  

4. Introduce fuel-efficient driving practices 


Drivers are one of the biggest fuel efficiency influencers and by improving their practices, meaningful changes can be made. Driver training is one thing that is often overlooked by fleet managers. The key is to educate your drivers on aspects such as:


  • Fuel usage when idling 
  • Speeding
  • Harsh cornering and braking 
  • Changing gears too late

Fleet management solutions can draw upon a wide range of insights by taking live data directly from vehicles to either profile individuals or entire fleets. By keeping drivers accountable, fleet managers can create and begin to implement driver training programs.

5. Retain your drivers 


Optimising routes and overall production can have a massive effect on the morale of your drivers. Drivers can easily find themselves taking on a huge amount of stress from failed deliveries, poor communication, unachievable numbers and excessive scheduling. 


If morale is boosted, stress is reduced and more attainable goals are set in place, then a company is more likely to retain its drivers and therefore reduce fleet costs by saving on recruitment.

FAQs about reducing fleet costs

Can you reduce fleet costs with electric vehicles?


Yes, you can reduce your fleet costs with electric vehicles by focusing on finding charging points that offer greater cost effectiveness. 


Prices across different charging points can vary drastically, resulting in thousands of pounds being spent on vehicles that make long or frequent journeys. There are apps that can be used to help drivers find the most affordable charging points by signposting the best deals in their area. 


With fleet management software, the location of the charging points can be pinpointed, allowing the diver to plan routes effectively, and therefore improve workload efficiency. 

Can you reduce van and truck fleet costs?


Yes, no matter what kind of fleet you have, using our five tips outlined above will help you to reduce van and truck fleet costs


The key areas you should focus on when aiming to reduce your van and truck fleet costs include:


  • Improving driver standards and safety 
  • Keeping all vehicles maintained regularly 
  • Introducing fuel efficient practices 
  • Optimising your drivers routes to and from jobs 


How can you reduce construction fleet insurance costs?


Although you may not be able to implement some of the tips we have already mentioned for your construction fleet, there are a few other ways to reduce your construction fleet insurance costs. 


Firstly, try to limit the amount of claims you have. This means encouraging your drivers to always stick to specific working standards, both by law and by your own policies. To help encourage this, you can introduce driver reward schemes and policies. 

Ensuring you are legally compliant is another way you can reduce costs on your construction fleet insurance. Important jobs such as vehicle and machinery checks, periodic servicing and part replacements can all be flagged up well in advance by using telematics. This way, there is no excuse for keeping vehicles that don’t comply with legal standards.

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