Small businesses often need a fleet of vehicles to carry on their trade. From executive cars for sales reps to small vans for deliveries, the company fleet is a vital part of everyday business operations. Naturally, there are costs involved in managing a fleet of commercial vehicles, so in this article, we have some tips to help you keep costs and headaches to a minimum.
Do You Need a Fleet of Vehicles?
Before you sign up for lease agreements or purchase any vehicles, decide whether you actually need a fleet. There will be instances where it is more cost effective to pay employees an allowance for using their own vehicles.
Speak to your accountant about the possible tax liabilities associated with providing company-owned vehicles. There is a difference in terms of tax liability between pool vehicles (vehicles available to everyone working for the business) and vehicles provided for the sole use of a single employee, so bear this in mind.
Devise a Company Fleet Policy
Have a fleet policy in place. This should include reimbursements for privately owned vehicles, who can drive what vehicle, and if you provide company vehicles, what type of vehicles you are going to provide. Be aware that some users cost the business more money. For example, insurance for high risk drivers is more expensive. This could be a problem if you employ younger drivers.
Note down how long you expect vehicles to remain in the fleet, including the age of the vehicle and how many miles it can do before a replacement is needed. You will need to have processes in place for information gathering. For example, mileages need to be recorded, along with service intervals and fuel usage. Make sure each employee fully understands how to record this information. Perform checks to ensure the information provided is correct. This is very important if vehicles are being used for private as well as company use. Otherwise, you could end up reimbursing employees for fuel used for private mileage.
Have systems in place to keep costs as low as possible. Shop around for the best leasing deals and form relationships with local auto shops to keep service and maintenance costs as low as possible. Use a reputable insurance broker to manage your fleet insurance. This is important if you need specialist insurance, such as high risk auto insurance.
Track your fleet and monitor costs, so you can review vehicle usage and manage drivers who incur unnecessary costs, such as fines and penalties. From high risk car insurance to excessive fuel costs, there will be instances where it isn’t cost effective to allow some employees access to company vehicles. This is a tough decision to make, but running a small business requires tough decisions every day.
Aim to continuously improve the management of your company fleet. If you run several autos, have one person in charge of fleet management to ensure systems run smoothly. They are better placed to identify where improvements can be made, which will save you money.