Manage your costs

In today’s challenging business climate, cost control is critical and in an area such as fleet management, monitoring and managing budgets is the number one priority for most companies

Whilst our AutoSolutions team can assist in creating the most cost efficient fleet policy and determining the optimum funding route, the need to manage ongoing costs remains….which is where ProFleet2 can help.

By opting for the Fleet Manager view, with driver consent, fleet managers have a complete overview of their fleet and their current status, with dashboard reporting to highlight areas of potential risk to budgetary control:

Business mileage capture

Having accurate, reliable mileage data ensures that businesses re-imburse their employees at the correct rate and avoid paying ‘inflated’ costs calculated from guestimated or ‘ghost’ journeys. Even assuming a 10% ‘error’ in business mileage claims would result in an added cost to a business of over £400 per driver over a typical 3 year contract (15,000 business miles pa @ 9ppm); over a fleet of 100 cars this equates to >£40,000 over a 3 year period.

Improved driver behaviour

As an optional upgrade within the ProFleet2 Premium package, fleet managers can also be alerted to other aspects of, potentially, dangerous or costly driving behaviour with advanced driver profiling:

  • Harsh acceleration
  • Excessive speeds
  • Heavy braking
  • Excessive idling

Even where driver profiling is not selected, however, with the greater visibility of ProFleet2, employees are more likely to drive responsibly and operate within ‘best practise’ guidelines, helping the overall operational efficiency of the fleet.

Insurance premiums

By maintaining detailed online records of all journeys and driver profiling (where selected) companies will be able to supply their insurers with comprehensive data, giving the potential for reduced premiums. In assisting with stolen vehicle recovery reductions in insurance costs can also be significant too.

With GPS capability fitted within ProFleet2 since June 1st 2010 the risk of an unrecoverable vehicle, following a theft, is reduced significantly. Even without GPS functionality, however, ProFleet2 helped Police to recover over 40 vehicles worth over £1m in the last 2 years, resulting in significantly reduced premiums and indirect costs for ALD customers.

Having a vehicle stolen, obviously, has an adverse affect on future premiums; having a car off the road for 3 months whilst a new car is ordered could cost >£2500 for self insured fleets in hire car costs alone. For insured fleets this would inflate the claim which would impact on the renewal premium. Insurers generally leave claims for 6 weeks before any pay out so 6 weeks car hire is a minimum and correspondence and agreement of valuations often takes 3 to 4 weeks to settle.

Recharges

With ProFleet2 to remind drivers over servicing and MoT’s there is a reduced risk of recharges caused by poor service history and invalidated warranties. The reduced resale value of a 3 year old car with 30,000 miles and a missed service would be c.£250-£500; the cost of repairing or replacing a gearbox following a missed service might be c.£2500; an invalidated warranty repair e.g. starter motor or new engine would be anything from £250 to £3500 respectively. All needless recharges, where ProFleet2 does the chasing for you.

Excess mileage

With remote odometer readings fleets are always in control of their fleet’s actual mileages which reduces the risk of excess mileage charges as contract re-scheduling can be carried out more pro-actively and with greater certainty, resulting in a better alignment of ‘actual’ v ‘planned’ contract mileage. A typical ‘over-mileage’ of 10,000 miles could be £800 in unbudgeted excess mileage versus a rescheduled contract rental.

Hire car costs

With pro-active service reminders resulting in advance service booking fleets should see their hire car costs reduce with the greater availability of courtesy cars. Late booking of services will generally result in this facility not being available and over the life of a typical contract this would result in a needless cost of >£120 per car. Multiplied over the fleet and the costs increase significantly.

ECO Tax efficiency

For ECO schemes it is critical for companies moving from annual to monthly reconciliation to have mileage records submitted on time every month. Where no mileage is submitted the company will have to assume 100% private mileage, resulting in the grossing up of the monthly allowance e.g. 1000 business miles at 40p = £400 tax free or £400 grossed up for tax and NI @ 41% = £677. The cost would be £277 per car or >£27,000 for a fleet of 100 cars.

Benefit in Kind

Having an auditable control of LCV’s ‘out of hours’ will reduce the likelihood of drivers having to pay increased BiK due to the vehicle, potentially, being classified as available for private use – a cost of £660 pa per driver (22% tax payer @ £3000 BiK).

Running costs

Having a tighter operational control over LCV’s 24x7 should reduce business mileage ‘out of hours’.  Assuming this results in just 50 miles fewer being driven each week, over 3 years this would save c.£1500 on fuel costs + >£450 in rental costs alone. For a commercial vehicle fleet of 100 this would result in a cost of £195,000 over a 3 year contract

Administrative costs

ProFleet2 helps in a number of other ways too, improving driver and business efficiency in many areas. With typically 3-4 services required over a 3 year contract, with each service absorbing a minimum of 2 hours driver time without ProFleet2 e.g. booking in, dropping off, collection, liaison, etc, @  £40 per hour this is over £300 per driver. There is significant driver and fleet manager administrative time wasted in processing stolen vehicle insurance claims too; a conservative 5 hours of time costing over £200 per incident. Even assuming 15 minutes per week is spent completing journey reporting for business mileage reimbursement this equates to 39 hours over a 3 year contract, or over £1500 per driver – or £156,000 for a fleet of 100 cars.