Downsizing the fleet size for greater savings
The larger the fleet, the greater the chance that there are vehicles out there that shouldn’t be, or don’t need to be on the roster. If the fleet manager doesn’t track inventory carefully and regularly, there could be dozens of cars and trucks that were never turned in, were turned in but not sold, are being held by a branch office as a convenience (pool) car, even sitting in storage, unrepaired, after a snowstorm.
All of these vehicles represent money wasted. Even if a vehicle is fully amortized (and thus is not charged a lease payment), finding it and getting it sold will bring several thousand pounds back into the company coffers. And, unless a branch has formally requested, and been given, permission to keep a pool car around, such vehicles aren’t meant to be mere conveniences, they’re meant to do a job. Find them and sell them.
Along similar lines, although most lessors are efficient at picking up off-lease units that have been dropped off at a courtesy delivery dealer, there are inevitably those that fall through the cracks, and sit for weeks or months unsold. An unsold vehicle is one that is still “on the books” and may even continue to be billed a payment. Track replacement vehicle pickups and the vehicles they replace, and make certain that they are picked up promptly.
Finally, once sold, the proceeds should be applied and payment stopped. Again, FMCs are good at keeping inventories and billings up to date, but there are errors that can cost the fleet money. Track inventory regularly, and keep levels as low as the mission permits. Get rid of surplus vehicles, get proceeds applied promptly, and you may find tens of thousands of pounds in “lost” funds.
completing and using condition reports properly
Well-run fleets require drivers to submit vehicle condition reports on some regular schedule during the year. Beyond simply knowing what condition a vehicle is in, getting these reports is only the first part of the process.
All condition reports should be completed by the driver, but also endorsed by the driver’s manager. This will enable the manager to keep track of the condition of the vehicles for which he or she is responsible. Condition reports should be required at least twice each year, more often if time and resources permit. Where are the savings in simply knowing condition? They aren’t in knowing, the savings are found in actions taken where needed to handle items that require attention:
- Body: A mere surface scratch is normal wear and tear, and will neither get worse as time goes on nor impact residual value. But, dents and other damage that breaches the finish will ultimately rust, and cost far more to repair than if handled early on. Along with the report, require any body damage to be documented with photos, and when repairs are needed, have them handled immediately.
- Tyres: Tyre condition is, first of all, a safety concern, so any condition requires immediate attention. Slow leaks can become fast leaks, or even a flat tyre. It is much less costly to repair a slow leak than it is to replace the tyre once it has failed.
- Glass: One of the most common deductions from resale value is windshield replacement. A condition report should indicate glass damage; so-called “star” breaks, or “bulls eye” breaks can be safely repaired; if not, they can spread beyond repair size and a complete replacement results.
Not unlike your health, proper use of condition reports and actions taken as a result can be the kind of “preventive medicine” that will help avoid thousands in excess costs.
Checking the trees as well as the forest
Sometimes it may seem that fleet managers have neither the time nor the resources to get deep into the weeds of costs; they are lucky to be able to track those big items of depreciation and fuel. But, the choice is relatively simple. Since management is constantly looking for savings, there is not much else that is as productive as doing precisely that. Even more so, a fleet manager who has been on the job for years has likely squeezed most of the excess cost out of the budget he or she inherited, Looking for lost pounds can help find even more. It’s worth the effort.
Learn more about how Winflotte’s software functionality and range of Modules can help you manage your fleet costs. Please contact us for more information.