How To Tackle Rising Fuel Costs


Practical things you can do as a manager

Any business that operates vehicles these days is undoubtedly exceeding their vehicle fuel budget. In addition, future indicators predict a continual increase in fuel prices. In fact, the cost of fuel is closing in on depreciation as a vehicle’s greatest expense. Current fleet statistics for operating expenses of an intermediate sedan puts fuel at around 44% as compared to 50% for depreciation.

Unfortunately, you can’t do much about controlling the price of fuel, but there are options available to you to better control your company’s fuel expense. Following are some options companies can consider. Select the ones that make the most sense for your company, and take action to implement them.

1.Influence a change in driver behavior. Excessive speed, jack rabbit starts, maintaining proper tire pressure, and unnecessary idling all consume excessive fuel. These factors alone can affect your fuel mileage over 20%.

Solution: Frequent and effective communication to your drivers is key. Emails, company newsletters, or perhaps even a mpg contest will get driver attention and reward you with compliance from the majority of your drivers. Keep the message alive – hand out tire gauges to drivers to raise the level of awareness.

2.Review your company vehicle maintenance plan. Dirty air filters can cost you up to 28 cents per gallon. An out of tune engine can cost you up to 11 cents per gallon.

Solution: Actively enforce compliance with manufacturer recommended maintenance. Make it easy for your drivers to get their vehicle in for maintenance? An iron clad policy on vehicle maintenance is essential. There are a number of local and national maintenance management programs that you can enroll in. Capital Lease Group can assist you with selecting a plan that best fits your operation.

3.GPS Telematics. This technology is more common in service and delivery operations, however we may see a broader application in the future. GPS helps you to identify improper vehicle use, monitor unauthorized fill-ups, and pinpoint excessive speeds. GPS can also assist you with routing and dispatching vehicles more effectively.

Solution: There are a number of GPS systems on the market today. The cost of ownership is coming down. Capital Lease Group has partnered with one of the top Telematic firms in the country. Let us assist you with the right solution at the right cost.

4.Review your vehicle selection. You can save around $14 per month for every 1-MPG difference based on a vehicle that travels 25,000 miles per year and based on current fuel costs.

Solution: Stop repeating history by automatically replacing vehicles with the same model. If reducing engine size or cargo volume is an option, consider upgrading your vehicle fleet with smaller fuel efficient models. There are many new vehicle choices available with improved fuel mileage. Do the research before you need to replace the vehicle. A sound Vehicle Management Program from Capital Lease Group can benefit you by implementing a replacement plan rather than making a last minute purchase.

5.Reduce your payload. A company car or delivery truck uses more fuel to move excess weight. Every 100 pounds of unnecessary weight costs you about 6 cents per gallon.

Solution: Influence driver behavior and implement new company policies. Frequent communication will raise driver awareness and gain compliance. Contractors might review the necessity of the tools and equipment selection that are carried on every truck. Evaluate alternative options as opposed to transporting unnecessary weight from job site to job site.

6.Alternative-fuel or hybrid vehicles. There are an increasing number of alternative-powered vehicles available to fleets that want to reduce fuel consumption. Current fuel costs have adjusted the cost of operation comparison and break-even points between gasoline and alternatives, so it merits review.

Solution: Explore the potential advantage of alternative-powered vehicles. Consider your specific application. The uncertainty of acquisition costs and resale value must be factored into every comparison. Capital Lease Group is prepared to assist you with your research.