Many companies do not manage their company cars effectively, leading to high operating costs. However, procurement professionals can look at reducing the cost of fleet cars.
Here are some tips for reducing the cost of your company cars:
Purchase of company cars
Buying company cars is very different from buying a personal car, so procurement should look at creating a fleet plan. Professionals should then check the discounts and incentives that car dealers and showrooms offer corporate clients which can significantly reduce the cost of buying vehicles. Procurement should analyse all makes and models to ensure it finds a good deal. A car with low fuel consumption and low-maintenance will result in extra savings.
Maintain meticulous records on vehicle maintenance to control the spend on this. Make sure that you approve repairs for the fleet cars after checking the maintenance records, as doing so will prevent you from spending too much on unnecessary repairs.
You need to determine the ideal cycling point for different vehicles in the fleet to help minimise depreciation expense. Remember, if you put vehicles out of service too soon, it will increase their depreciation expense. However, keeping it in the fleet for too long will decrease the value. Ensure you opt for vehicles which offer the best performance to suit your business, to reduce depreciation expenses.
You can control fuel costs by replacing fuel-guzzling, older vehicles for newer, more fuel-efficient ones. Educate drivers to reduce their speed and cut idling time to save fuel as well as using filling stations which offer rewards and incentives to top up fleet cars to enjoy further savings.
These tips for reducing the cost of company cars will decrease the spend in an area on which procurement seldom focusses.