While it may not appear like more conventional businesses, which may operate out of a single building or location, managing a fleet is still a business. And just like in any other business, fleet managers are under pressure to reduce costs and maximize profits.
Controlling a budget can be a tedious task for fleet managers, but done well, it can help create an in-depth fleet management cost analysis. Let’s break down how you can track your expenses and where to look to save money.
Understanding Fleet Management Cost Analysis
Determining Your Total Cost of Ownership
When building your fleet management cost analysis, the first step is calculating your total cost of ownership (TCO). The TCO of your fleet is the purchase price of your assets, as well as the costs of operation. To effectively calculate and track your TCO, it’s important to break down your operational costs.
Operational costs may fluctuate from month to month, as not every price tag will remain constant. Some variable costs may include:
- Part replacements
Meanwhile, some given costs that you can better account for each month may include the following:
- Licenses and permits
- Lease payments
Other costs, such as fleet maintenance, could exist in either category, depending on how you choose to utilize those services.
Using Your TCO To Save Money
Now that you have determined your total cost of ownership, you can now look at where you can save money.
Deciding whether it’s in your best financial interest to rent, lease, or own your fleet of vehicles is one of the main ways you can save money. If you have a lease, you can look into your agreement and see if it can be improved upon. If you own your fleet, you can consider leasing it out to make additional money. If you’re renting, you may save money upfront and improve utilization rates. By analyzing your TCO data, you can determine which option makes the most sense for your business.
Calculating your TCO also allows you to see if the use of your fleet is being maximized. This will provide you with information regarding whether you have enough trucks, too many, or not enough. By selling an underutilized truck, you’ll be able to make back some money. On the other hand, by purchasing an additional one to take pressure off the others, you’ll ensure you’re not overworking your fleet and will be able to take on more business.
By taking the time to properly establish the elements of your TCO, you will find the task of managing your fleet much more obtainable, thus saving you money down the road.
Do you need industry-leading heavy-duty truck repairs in Edmonton? Mach 6 is your team. As the leading experts in truck repairs, we offer you fast, high-quality services that maximize your heavy-duty trucks and fleet’s operational capacity, eliminating downtime and enhancing productivity. With mobile truck repair services and a heavy-duty mechanic shop in Edmonton, we can provide both in-house services and 24/7 on-the-spot emergency repairs across Alberta, guaranteeing you access to high-quality heavy truck repair services. Our highly-trained Red-Seal heavy equipment technicians can get your truck back on the road, undertaking major repairs or quick-fire fleet maintenance, whenever you need it! Call us now!