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How to reduce your fleet operation costs

Improving safety and fuel efficiency and streamlining processes go a long way in cutting fleet costs.

Your business can cut down on operational costs to make your fleet more efficient, saving money by reducing mileage, improving fuel economy, lowering maintenance costs and boosting customer service. To help you achieve your goals, take advantage of risk consulting through your fleet insurance company as well as fleet management software that automates GPS tracking, reporting and insights for improving efficiencies.

How to reduce your fleet operation costs

Ongoing fleet costs can be one of the most significant expenses in your operating budget. In addition to performing preventative maintenance and obtaining the right commercial car insurance coverage, consider these money-saving options:

1. Look for inefficiencies from every angle.

The routes that drivers take affect your fleet’s efficiency with delivery times and fuel consumption. For example, UPS famously eliminated 90% of left turns from driver routes to save 10 million gallons of fuel each year.

But routes aren’t the only way to improve efficiency. Consider the time spent tracking your vehicle’s maintenance, completing maintenance to improve your fleet’s performance and whether driving speed is optimized for fuel-efficiency.

Also, look at streamlining the responsibilities of drivers, maintenance and office workers to keep vehicles on the road. Find mobile mechanics or fuel delivery companies to visit your garage to service your vehicles when they aren’t in use.

2. Use fleet management software.

Consider the technology you use to track your fleet and whether a new product might improve your fleet operation’s efficiencies. If you use multiple tools for operations management, GPS tracking and driver safety training, look for new tools that roll these features into one package.

Also, take advantage of fleet consultants that your vehicle insurance company or software tools include, getting an outside perspective on ways to improve your operations.

3. Cut unnecessary vehicles and consider owning versus leasing.

Track the different groups of vehicles that your business uses, and calculate the operation costs for these vehicles. If you can use a vehicle with general equipment to cover a specialized task, you’ll reduce the need for specialized vehicles. When selling specialized vehicles, consider that vehicle’s market and whether waiting or using a specific selling method like an auction might make more money.

While you’re looking at the efficiency of the vehicles you use, consider whether you can rent a specialized vehicle when you need it to save on storage and maintenance costs.

4. Improve drivers’ safety.

GPS tracking and monitoring driving habits can help you identify problem areas to reduce costs, such as idling, route inefficiencies or unsafe driving behavior. Then, give feedback to drivers to improve their habits and potentially lower insurance costs. Most commercial fleet insurance companies offer discounts for companies that participate in telematics and safety evaluations.

5. Negotiate the cost of daily operations.

Large fleets give you negotiating power to lower rates for fuel and mechanics. Negotiate your fleet’s everyday costs and consider rewards programs like business credit cards or fuel point programs to further lower these costs.

How many vehicles are considered a fleet?

Most commercial insurance companies consider a fleet to be at least five vehicles, but some policies allow for as few as two. However many vehicles are in your fleet, you typically get a multi-vehicle or fleet discount for insuring all your vehicles with the same company.

Benefits of lowering fleet costs

Improving the way you manage your fleet can help you cut costs and save time. Here’s a list of points to focus on, and how they reduce costs in the long run:

  • Reduce mileage and gas. Plan your routes more efficiently to save on gas and cut fuel costs.
  • Improve safety. Driver training can improve driver safety, reducing the risk of accidents or damage to vehicles and drivers.
  • Extend the life of your vehicles. With proper maintenance and more efficient management, your vehicles will last longer and maintain their value.
  • Lower maintenance costs. Routine maintenance reduces costs in the long run.
  • Boost resale value. More efficient vehicles last longer and have a higher resale value.
  • Reduce insurance rates. Taking better care of your vehicles and reducing the risk of damage can help you lower insurance rates for your fleet.
  • Increase efficiency. An optimized fleet can help your business be more productive, improving business relationships and increasing revenue.
  • Improve customer service. GPS tracking can improve communication with drivers, clients, distributors and suppliers.
  • Store vehicles safely. Keep your vehicles in a garage or behind a locked lot.

How telematics works for fleet operations

Telematics devices allow you to track driving habits and vehicle activity. They’re ideal for fleet management because they help you manage risk, increase productivity and get better insurance rates.

There are multiple installation methods, though all of them transmit data to your office using a cellular network.

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Benefits of telematics for fleets

Telematics devices provide a number of benefits:

  • Speed. Track your driver’s speed with GPS data.
  • Time. See when your drivers are on and off the road to optimize safety and productivity.
  • Route. Track driving routes to ensure that your drivers are traveling efficiently.
  • Driving habits. Monitor turning, acceleration and braking habits to reduce the need for vehicle maintenance.
  • Vehicle compliance. Ensure that all vehicles in your fleet are compliant with emissions and inspections.
  • Productivity. Dispatch the nearest driver, schedule roadside assistance and set territories.
  • Fuel consumption. Monitor fuel consumption to reduce gas and optimize your fleet.
  • Diagnostics. Schedule maintenance based on real-time data.
  • Insurance. Tracking habits and activity helps you manage risk and prevent damage to your vehicles. In return, many providers will offer car insurance discounts. And if you have a specific type of vehicle fleet, you may opt for insurance specific to your industry, like fleet insurance for vans or fleet truck insurance.

Commercial telematics software to consider

While telematics devices and software might be available through your insurer, there are many other providers that offer this service:

  • Geotab. A full-service telematics and fleet management solution that allows you to track and communicate with drivers.
  • Aeris. Customizable and scalable telematics for a range of vehicles.
  • FleetComplete. GPS tracking and telematics that integrates with smartphones for easier fleet management.
  • cTrack. Comprehensive vehicle tracking with fleet management capabilities to help you cut fuel and maintenance costs.
  • Element fleet management. Fleet telematics and consultants that can help you identify and act on improvements and cost-saving opportunities.
  • Key telematics. A feature-rich software platform that integrates into a handful of different GPS tracking devices.
  • Route4Me. As the first and only HIPAA-compliant telematics provider, it uses encryption to keep your data safe.

Is telematics secure?

Most telematics providers take extensive measures to keep your data safe, though the level of security varies depending on the company. If you’re worried about data security, ask providers for more details or consider companies that take extra steps to be secure and compliant like Route4Me.

Compare fleet insurance to lower costs

Consider insurance companies that offer the features you need to keep fleet costs low, and select Get quotes to customize your policy.

Name Product AM Best financial rating Available states
Not rated
All 50 states
Compare multiple quotes for business auto insurance to find the cheapest rates from this online commercial insurance broker.
Insurance321 commercial car insurance
Not rated
All 50 states
Connect with a commercial agent who understands your industry and receive a personalized quote in as little as four minutes.
Liberty Mutual commercial car insurance
All 50 states
Take advantage of telematics to monitor and improve employees' driving and save on insurance premiums.
Allstate commercial car insurance
All 50 states
Customized, industry-specific polices like leased car coverage plus quick claims filing.

Compare up to 4 providers

Bottom line

Reduce the time and money spent on managing your fleet. Using fleet optimization strategies like route planning, telematics and the right commercial insurance policy for your fleet can help you reduce operating costs.

Common questions about reducing fleet operation costs

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