5 fleet expenses—and how to manage them

January 29, 2018 -  By

A landscape or irrigation contractors’ annual fleet management expenses are as much about the management as they are about the fleet, says Enterprise Fleet Management’s Don Duckworth, who provides customized fleet recommendations for businesses on the west coast of Florida.

Presenting at the 2017 Irrigation Show Education Conference in Orlando in November, Duckworth shared his practical tips for fleet management success.

Expense #1: Fuel

Small businesses have an average vehicle age of three or more years; yet, even though their maintenance costs are increasing, fuel is still the largest line item under fleet expenses, Duckworth says. If you don’t have a business fuel card program, you don’t need to spend a lot of money to join; some are free. Signing up will help you identify your costs and take advantage of savings.

Expense #2: New vehicle purchases

Introductory pricing at the beginning of the model year—July or August—is typically $1,200 less than later in the model year, Duckworth says.

There are also incentives for buying new, like loyalty or conquest programs, where the manufacturer will either reward the buyer for repeat business (loyalty) or for taking away business from the competition (conquest).

Buying more than one vehicle at once or proving you meet fleet standards also will lead to more incentives. VIP orders—those with 25 or more vehicles—can qualify for incentives of $4,000 per vehicle.

Duckworth also recommends going to a dealership with a dedicated commercial sales department.

Expense #3: Depreciation

The lowest resale values are from December through February. A proper resale strategy can save you $1,500 per vehicle.

“If you have a vehicle sitting there growing weeds up around the tires in this time frame, don’t sell it. Wait. It will be worth more in April than it would have in January,” Duckworth says.

If you are debating selling a vehicle in the early summer, “go ahead and get rid of it” before the late-summer months, says Duckworth. By August, a vehicle will be considered a full year older based on the model year.

Expense #4: Maintenance

Duckworth recommends owners create an expense history for each truck to see how the maintenance cycles happen, based on the specific model. When you identify the lows, you’ve identified when you should sell in the future.

To keep maintenance costs in check, track your expenses monthly.

“Most companies cannot define their average monthly cost on maintenance for each vehicle,” Duckworth says. “Look at your P&L, pull out the fleet line item, divide it by the number of vehicles and then divide it by 12. Then go back and look at the last three years.”

Expense #5: Accidents

If your crews have been accident-free, insurance should be a place where your business qualifies for insurance company discounts. And don’t ignore the potential for future accidents, Duckworth warns.

Some new vehicle safety features that could save you money on insurance by making your crews safer are blind-spot warning, rear video and adaptive headlights, Duckworth says.

He also recommends using telematics and fleet tracking programs. These services make owners and managers more educated and, ultimately, their drivers safer.

Photo: ©istock.com/phive2015

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