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Updated Feb 12, 2024

9 Ways to Reduce Fleet Maintenance Costs

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Max Freedman, Business Operations Insider and Senior Analyst

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The costs of operating a fleet of vehicles run far beyond the initial purchase prices. When you factor in licensing, repairs and more, managing a whole fleet of business vehicles is a sizable expense for your company. Although your fleet is vital for timely service, your operations will result in far less profit if your vehicles are rapidly draining your bank account. The good news is that lowering your fleet maintenance costs is indeed possible, especially with GPS fleet management and telematics systems.

Editor’s note: Looking for the right GPS fleet management software for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

Tips to reduce your fleet maintenance costs

Although fleet maintenance costs are inevitable, they don’t have to be sky-high. Here are some best practices for fleet maintenance that can reduce your total cost of ownership (TCO), which encompasses the cost of your fleet’s capital expenditures, repairs, depreciation, administration and licensing. You can learn more about each category farther down.

1. Install GPS fleet management software.

The best GPS fleet management software gives you constant access to real-time data about your drivers’ fuel use, locations and safety. It also alerts you to any concerning events, such as aggressive driving or vehicle theft. This comprehensive and constant overview of your fleet’s performance can help you pinpoint and resolve inefficiencies to lower your TCO. See which GPS fleet management providers and telematics solutions we recommend below.

2. Use fewer vehicles.

If you have the capacity to spread the same number of drivers across a smaller fleet, it’s a surefire way to cut your costs. Of course, you shouldn’t eliminate so many vehicles that your drivers are rushing between stops on their routes and thus driving unsafely. Try to find a balance that reduces costs without sacrificing efficiency.

Make sure not to eliminate so many vehicles that your drivers can’t handle the increased workload.

3. Take shorter routes.

If your fleet doesn’t have GPS routing, you should implement this direction technology ASAP. GPS routing calculates the fastest route to your drivers’ destinations based on real-time traffic data, saving your team time and thus money. With less time on the road comes less wear and tear that would add to a vehicle’s depreciation and repair costs.

4. Upgrade your parts.

Fleet managers often swap out their vehicles’ old parts for new ones to make their fleets more efficient, which has the secondary effect of reducing fleet costs. The upfront cost of part replacement comes with more efficient, higher-tech vehicle operation in the long term that can substantially reduce the frequency of costly repairs.

5. Prioritize smart fuel use.

Fuel is among the biggest costs in maintaining a fleet. It’s an inescapable expense, but you can minimize it in two ways. First, aim for a larger average value of miles per gallon among your fleet. The previously mentioned vehicle part upgrades can help on this front, as can training your drivers in fuel-efficient practices.

Second, in your fuel efficiency training, you should discourage excessive idle time and hard braking. You should also encourage your drivers to turn off the ignition and remove the keys at gas stations and rest stops. Although each instance of these gas-saving tactics conserves only  a small amount of fuel, your cumulative fuel savings could be substantial.

6. Replace aging vehicles.

At some point, driving old vehicles costs more than the (admittedly high) price of obtaining new ones. Vehicles that require frequent repairs and have less-efficient gas tanks result in extra fleet maintenance costs — perhaps higher than the cost of obtaining new vehicles. Financial forecasting can help you decide when to replace your vehicles and with which vehicles to replace them.

7. Balance acquisition costs and depreciation.

Depreciation, though a somewhat abstract concept, matters from the moment you buy a new vehicle. Some vehicles depreciate so quickly that their lower purchase price may mask higher long-term costs.

For example, let’s say you buy a $12,000 vehicle with a 40 percent annual depreciation rate rather than a $15,000 vehicle with a 20 percent annual depreciation rate. In time, the first vehicle’s quicker depreciation will render its costs higher than the second’s. This is why you should consider all relevant financial metrics when buying new vehicles — to keep your TCO low.

Did You Know?Did you know
The vehicles in your fleet are far from your only depreciable business assets. Other assets that depreciate include computers, office furniture, equipment and copyrights. Learn more about depreciation and how it works.

8. Lower your off-the-road costs.

Fleet maintenance isn’t just about your vehicles hitting the road. It also involves where you store them and where you go to oversee your non-road operations; your office and warehouse rent count as fleet maintenance costs. Lowering these and other overhead costs — or perhaps eliminating certain offices and storage spaces — is an easy way to cut your long-term TCO.

9. Implement driver scorecards.

Driver scorecards help keep your fleet safe on the road because they assess your drivers’ road habits, such as speed and seat belt use, and encourage safe driving behavior. They also apply to fleet optimization and productivity. As such, driver scorecards are ideal across the board for lowering your team’s operational costs and thus your TCO.

Types of fleet maintenance costs

A high total cost of ownership can indicate a need to replace outdated vehicles or switch to fleet leasing. Here’s more information on each cost that affects your TCO.

  • Capital: Any time you spend money on your fleet, there’s a possibility that other types of spending would have led to a greater return on investment (ROI). This potential ROI gap is the hidden cost of obtaining fleet capital. You can counter it by increasing your fleet size, as the larger your fleet is, the better pricing deals you can negotiate with dealerships. Additionally, maintenance for larger fleets can be more efficient. However, as noted above, there are also advantages to having fewer vehicles in your fleet.
  • Repairs: Fleet repair costs typically increase significantly every year. You can limit the rate at which your repair costs increase by scheduling regular vehicle maintenance appointments even when no fixes are necessary. It’s crucial to find a repair provider that does quality work, as shoddy repairs can shorten your vehicles’ lifetimes.
  • Depreciation: Although you can’t prevent depreciation entirely, you can slow it down. There are industry-standard rates for depreciation based on vehicle age, but regular repairs can keep your vehicles in good enough condition to offset depreciation. You can also choose vehicles with lower depreciation rates, as the rates vary for different vehicle categories.
  • Administration and licensing: Although they are not as closely related to your vehicle’s physical condition as TCO components are, administration and licensing can cost a pretty penny. These formalities vary in cost by fleet and vehicle type, as licensure isn’t needed for dry-van and refrigerated trailers.

According to data from the automotive industry data company Vincentric, as of early 2024, TCO per mile ranges from just over 70 cents to above $1.40, with the high end corresponding to luxury vehicles. Although these numbers may seem small at first glance, think about the tens or hundreds of thousands of miles your fleet drives per year. You can probably see why it’s so important to continuously work to reduce your fleet maintenance costs.

Importance of calculating your fleet maintenance costs

If you’re going to operate a fleet that doesn’t break your budget, it’s vital to calculate and monitor fleet maintenance costs and TCO. Your total cost of ownership can help you determine when it’s time to replace vehicles or switch from buying to leasing. TCO calculations are also crucial for efficient fleet performance: The fewer repairs required, the lower the impact on your revenue.

In other words, if you regularly calculate your fleet maintenance costs and TCO, you’ll better understand when and how to modify your business’s and drivers’ practices to maximize your profit.

How to calculate your cost of fleet ownership

To calculate your cost of fleet ownership, you need to know the costs for each of the major expenditure points: capital, repairs, administration and licensing. You also should account for depreciation when calculating these costs.

The first step is to determine the per-mile cost for each of those expenses. One way to do this is to divide your repair costs for one month by how many miles your fleet drove and repeat that calculation with the other expenditure types. Once you have your cost per mile for each subcategory, you simply add them up to get your per-mile TCO for a given month.

For example, let’s say you have a fleet of Class 8 commercial vehicles. Your capital and financing costs for your fleet were $17 per mile, repair costs were $16.20 per mile, administration fees were $3 per mile and licensing costs were $2 per mile. In this scenario, you’re looking at the following TCO per mile:

$17 + $16.20 + $3 + $2 = $38.20 per vehicle

Of course, your fleet drivers might be driving tens of thousands of miles per month. As such, the above number is a bit misleading, as the actual amount you’re spending is several orders of magnitude greater.

TCO calculations also become more complex if your fleet comprises more than one vehicle type. Let’s say your fleet includes refrigerated trailers and Class 6 commercial vehicles. Your per-mile costs for your refrigerated trailers were $9.10 for capital and financing, $6.20 for repairs, 60 cents for administration and nothing for licensing. Your Class 6 per-mile costs were $28.50 for capital and financing, $15.50 for repairs, $2.90 for administration and $2.70 for licensing. In this scenario, you can calculate the following per-mile TCO for each fleet category:

Refrigerated trailers: $9.10 + $6.20 + $0.60 = $15.90

Class 6 commercial vehicles: $28.50 + $15.50 + $2.90 + $2.70 = $49.60

As such, your TCO is $65.50 per mile. You should note that, in this example, about 76 percent ($49.60 divided by $65.50) of the cost comes from the Class 6 vehicles. This uneven TCO distribution matters when you’re figuring out how to reduce your fleet maintenance costs.

Key TakeawayKey takeaway
To calculate your fleet maintenance costs, add up all capital, repair, administration and licensing costs per vehicle category. You can make this easier by tracking data using electronic logging devices (ELDs), which are also essential for adhering to ELD mandates required by law.

Best GPS fleet management software for managing fleet maintenance costs

These GPS fleet management systems rely on telematics and include tools that, when used properly, result in changes that lower your fleet maintenance costs and total cost of ownership.

  • Force by Mojio: The highly detailed trip history reports you can generate in Force by Mojio can be retained for up to 18 months. Alongside this extensive history of driver routes, you’ll get tools for scoring drivers, analyzing vehicle maintenance and receiving alerts to dangerous driving in real time. Act on the data you pull from these tools, and a lower TCO should result. Read our full Force by Mojio review to learn more.
  • Samsara: Samsara includes driver rewards programs, which you’re not all that likely to find in other fleet management systems. These programs incentivize your drivers to be safe on the roads, and this safety correlates with lower-cost fleet management. Check out our Samsara review to learn about the other valuable features included in this platform.
  • Azuga: This GPS fleet management solution integrates with fuel cards and points your drivers to the least-expensive gas stations nearby. Both of these features lower your fuel costs, as do the discounted tires and maintenance available to Azuga customers at Firestone locations. Learn more about this top-notch GPS fleet management service in our detailed Azuga review.
  • Motive: The Motive mobile app for drivers allows your driving team to play a more active role in fleet maintenance. Your drivers will get alerts when it’s time to check their fuel levels and air lines. Plus, they can upload photos of vehicle damage. Read our Motive review to learn about additional Motive tools that can lower your TCO.
  • ClearPathGPS: You can use ClearPathGPS to track your fleet’s engine idling. If you use this data to teach your drivers how to cut down on idling time, you’ll save on fuel costs and lower your TCO. Discover how else this GPS fleet management system reduces your expenses in our comprehensive ClearPathGPS review.

A lower TCO and better drivers go hand in hand

By regularly maintaining your vehicles and instilling a safety-first mindset in your drivers, you can lower your fleet maintenance costs and, for that matter, your operating costs. Taking these steps also results in smarter, better drivers. When both your vehicles and your drivers are high-quality, your team and goods reach their destinations on time and without any damage. Lowering your total cost of ownership isn’t just smart business — it’s good for your people, too.

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Max Freedman, Business Operations Insider and Senior Analyst
Max Freedman has spent nearly a decade providing entrepreneurs and business operators with actionable advice they can use to launch and grow their businesses. Max has direct experience helping run a small business, performs hands-on reviews and has real-world experience with the categories he covers, such as accounting software and digital payroll solutions, as well as leading small business lenders and employee retirement providers. Max has written hundreds of articles for Business News Daily on a range of valuable topics, including small business funding, time and attendance, marketing and human resources.
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