Vehicle downtime costs SMEs up to £30,000 a year

At a time when small businesses are under huge pressure to make every pound count, dedicated Ford dealer group Ford Retail, has released the findings of its SME research, which reveals that the UK’s SMEs are losing up to £30,000 a year from vehicle downtime.

To coincide with the launch of a dedicated fleet management service for SMEs, Ford Retail Business Solutions surveyed 250 small business owners to help the business community understand the true cost of a poorly managed fleet.

The results show that an overwhelming majority (88%) of small businesses believe they aren’t big enough to warrant a fleet management service, this is despite the fact the research reveals that operating even a small number of vehicles could be costing more than is being budgeted.

Nearly one fifth (18%) of UK SMEs are putting aside just £1,000 a year for their fleet’s servicing and maintenance needs, despite it costing closer to £8,000.

Respondents revealed that on average, each vehicle spends four days off the road a year, costing the business on average £200 a day in loss of manpower and productivity.

One in ten of those surveyed believed the cost is closer to £600, and for 6% up to £800 a day is lost. With an average fleet size of 10 vehicles, the loss is around £8,000 a year, but for just over one in ten (11%) of small businesses operating between 21 and 30 vehicles the cost could be closer to £30,000.

Another factor most businesses do not consider is the time spent managing the vehicles – with the research suggesting it takes an average of four hours a week.

With 52 working weeks per year, the average SME can spend around 192 hours a year organising services, maintenance, fuel management, purchasing, replacing vehicles, tax and insurance, as well as ensuring the vehicles meet the necessary legal requirements.

The research also revealed the people behind these hours of maintenance. Significantly, in nearly half (48%) of those organisations surveyed, either the business owner or managing director was responsible for their businesses’ fleet – only 13% employed a dedicated fleet manager and just 11% used a fleet management company.

This suggests that for a large number of the UK’s SMEs, instead of focusing on driving business growth, managing directors are spending half a day a week or 24 days a year preoccupied with the needs of their fleet – meaning the cost is potentially vastly more than what is budgeted.

Alan Maloney, sales development director at Ford Retail, said: “Our research reveals that many of the UK’s small businesses are seriously miscalculating the true cost of maintaining their fleets, large or small, and in most cases spending far more than is necessary.

“UK plc is looking at SMEs to lift us out of the downturn, and with so many wasting thousands of pounds a year in time and money, we would implore all small businesses to review their fleet requirements.”

According to Ford Retail’s research, fuel management and the increasing cost of fuel is the primary fleet management concern for SMEs (56%). With the average fleet of 10 vehicles clocking up 156,624 miles a year (15,624 per vehicle), it’s easy to see why.

Other pressures identified include: