Fleet News

Cost is biggest concern for 89% of fleet operators

Containing costs is the biggest worry for 89% fleet operators for the coming year, according to a survey by Venson Automotive Solutions.

The majority (80%) reported that the most important way suppliers can help businesses is to work harder to reduce costs.  

Venson believes that businesses that calculate the expense of running a fleet on the basis of a vehicle’s wholelife cost, will achieve the most effective reductions in financial outlay.

However, evidence suggests as few as one-in-five organisations use that strategy.

Alan McCleave, business development director for Venson said:  “When we analyse companies’ car choices, within existing grades, the wholelife cost deviation between the lowest and highest is frequently significant and that is money businesses are currently giving away, despite containing costs being their top priority.  

“Despite significant savings to be made by selecting vehicles based on wholelife cost data, a recent ACFO seminar highlighted only 20% of organisations use wholelife costs when compiling choice lists; a figure I believe is slightly generous.”

Of those surveyed by Venson, 71% said they are under greater pressure in 2013/14 to reduce supply costs, with 29% also under pressure to reduce internal costs.

In addition, 40% said they are more closely monitoring the financial viability of suppliers.

The key areas fleet operators feel they will be spending less on over the next 12 months is fuel cards (35%), as many look to implement an integrated solution.

McCleave said:  “The cost of fuel is going to become the biggest headache for fleet managers and one that could grow out of control if businesses don’t have strategies in place to deal with it.”

Vehicle servicing maintenance and repair (27%) and purchasing cars (25%) are the other areas fleet managers feel they can reduce spend over the coming year. 

In contrast to the cost-cutting areas, 21% of fleet managers feel that insurance is an area where they will spend more, with the natural rise in premiums.

Around a fifth (21%)  also said they will spend more on daily rental and fleet management, whereas 95% feel they will spend the same amount on risk management and 87% will be spending the same amount on telematics.

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