Those considering the purchase of a fleet management solution will usually be asking how much money such a solution can actually save. Obviously, a fleet management solution can greatly reduce your administrative workload but how much will it actually reduce your vehicle costs?
Realistically, it is not likely that a fleet management solution will enable you to achieve cost reductions in the higher percentage range. Let’s assume, for example, that you are seeking to reduce vehicle costs by 10%. Now, let’s roughly break down the types of costs involved in maintaining a vehicle:
– Repair & maintenance
– Tyres
– Insurance
– Tax
– Fuel
Is it realistic that a fleet management solution will allow you to reduce the above costs by more than 10%, for every vehicle in your fleet? Will your vehicles suddenly consume 10% less fuel simply as a result of using the software? Will it reduce the loss of value? Will insurance premiums and taxes suddenly become cheaper? Wil the rate of wear and repairs decrease? If we take the example of a medium-sized passenger car, we can assume a mileage of 30,000 km/year and a total cost of about 15,000 CHF per year and vehicle (0.50 CHF/km). 10% of 15,000 CHF would represent a saving of 1,500 CHF per vehicle – over just one year!
Where, then, would we obtain overall vehicle cost savings in the double-digit percentage range?
It goes without saying that a fleet management solution will help you identify outliers and make a few tweaks based on greater cost transparency. It’s likely that the proper use of such a solution will help you identify a couple of potential savings, and perhaps avoid the odd bill. That said, cost savings in the double-digit percentage range are not much realistic – even less so for the fleet as a whole. This would require that you attain the same 10% cost reduction for every single vehicle.
Example:
Fleet size: 100 vehicles
Average mileage: 40,000 km
Total costs per km, on average: 0.50 CHF/km
Fleet costs/year: 2,000,000 CHF (administrative costs not included)
A 10% reduction would amount to 200,000 CHF/year.
More realistic, though far less effective for advertising purposes, are savings in the region of 1–5%. That may not sound so much at first. Considered from a monetary perspective, however, it’s certainly worth it, including in regard to the additional simplification of your administration. Moreover, a 5% reduction on the above total of 200,000 CHF is not to be underestimated.
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