Managing Fleet Costs

Managing a fleet can be expensive and time-consuming. With the support of Northgate and our extensive fleet products, we can ensure your fleet is running as efficiently as possible keeping you on the road for your customers.

Understanding Fleet Costs

Fleet costs, also known as total ownership costs (TCO), are the expenses associated with managing and maintaining your vehicles throughout their lifecycles including the cost of acquisition, fuel, maintenance, insurance, and depreciation.

TCO expenses can be categorized into two main types: Fixed and Variable.

Managing fleet costs optimises your fleet operations, efficiency, and financial sustainability by implementing cost-saving measures, adopting fuel-efficient technologies, and staying informed about industry trends and regulations. Knowing your fixed and variable costs helps you to maintain an ongoing budget long-term by highlighting where you are spending too much money – or not enough.

Fixed vs. Variable Costs in Fleet Management

Knowing the difference between fixed and variable costs is significant for a leading fleet operation.

A fixed expense stays relatively unchanged each month, regardless of business output. A variable expense changes frequently based on output or market prices.

Keeping track of your fixed and variable costs helps you maintain an ongoing budget and make informed decisions on critical business decisions such as saving money on fleet management costs and maximising the value of your depreciating assets.

Fixed Costs Examples

Taxes
Insurance
Deprecation

Variable Costs Examples

Fuel
Maintenance
Tires

Fixed Costs

Fixed costs occur regularly, as they are generally based on time rather than usage and are essential for maintaining the fleet's operational capacity.

Variable Costs

Variable costs in fleet management are expenses that fluctuate based on the level of fleet usage and operational activities. Key variable costs include:

Strategies for Reducing Fleet Costs

Effectively managing and reducing fleet costs requires a multifaceted approach with a focus on implementing preventive maintenance programs to minimize the risk of breakdowns and expensive repairs and utilising telematics to optimise fuel efficiency through route planning, track vehicle health and monitor driver behaviour.

Fleet Optimisation

Right-sizing your fleet to match operational needs offers a range of benefits. By aligning the number of vehicles with actual demand, organisations can reduce upfront costs associated with purchasing or leasing excess vehicles. Right-sizing enhances fuel efficiency and lowers operating expenses as fewer vehicles are in use, contributing to a more sustainable and cost-effective fleet.

Additionally, right-sizing enhances overall operational efficiency, streamlining resource allocation and ensuring that each vehicle is utilised optimally, leading to improved productivity and long-term financial savings.

By combining fleet optimisation techniques, businesses can achieve a more streamlined, cost-effective, and environmentally friendly fleet operation, contributing to overall operational excellence:

Right-Sizing the fleet:

Evaluate and adjust the fleet size to match actual demand, preventing the costs associated with excess vehicles while ensuring that each vehicle is utilised efficiently.

Alternative fuel and electric vehicle options:

Explore alternative fuel options, such as electric or hybrid vehicles, to reduce fuel costs and environmental impact.

Regular audits and benchmarking:

Conduct regular audits of fleet operations and benchmark against industry standards to identify areas for improvement, cost-saving opportunities, and best practices.

Telematics and Fleet Technology

Technology plays a pivotal role in fleet cost management by providing real-time insights and automation tools that enables businesses to monitor, analyse, and optimize fleet operations, contributing to substantial cost efficiencies and improved overall financial performance.

Northgate telematics

Northgate Telematics improve business efficiencies alongside benefits for you and your drivers with a leading platform for tracking and cameras that provide live footage of any incidents. Telematics can be used to improve route planning for your fleet which can align with your businesses sustainability goals as you use less fuel and reduce your carbon emissions, helping your green compliance credentials.

Additionally, telematics can help reduce the insurance premiums on your fleet vehicles due to fewer accidents and collisions.

Our wide install network means your nearest install site is always a convenient distance away or we can even travel to your business.

Fleet Policy and Compliance

Fleet policies provide a structured framework for fleet operations management with clear guidelines on fuel efficiency, preventive maintenance schedules, driver behaviour, and vehicle acquisition. An effective policy establishes rules for vehicle utilisation, maintenance standards, and lifecycle management, to minimise unexpected expenses and reduce the risk of accidents and associated costs.

Additionally, well-defined policies foster accountability and compliance among drivers and staff, ensuring that the fleet operates within budgetary constraints and aligns with strategic cost-control objectives.

Northgate fleet compliance guide

Our FREE downloadable guide makes fleet compliance simple, saving you the time, effort, and headache.

DOWNLOAD THE GUIDE

Fuel Cards

Fuel cards are the complementary payment method for drivers at select fuel stations that allows fleet managers to track spend, limit usage and file expenses more efficiently. The AllStar fuel card is also available for electric vehicle charging. Fuel cards give you back control over your fleet's fuel costs.

We’ve teamed up with the UK’s largest fuel card network provider Allstar Business Solutions to give you access to over 7,700 fuel sites, covering 90% of the UK, and help simplify your fuel expenses.

The Allstar One Electric is a combined fuel and electric charging card with access to 1,102 rapid chargers, over 2,966 fast chargers and 9 charge point providers, including GeniePoint, Source London and Alfa Power.

Stay in control of your business fuel expenses with a 24/7 online account management dashboard that grants visibility of all card spend and the ability to control your spend amounts.