The,Most,Common,Mistakes,Fleet car The 10 Most Common Mistakes In Fleet Management
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Here at Fleetcutter, we've compiled the definitive list of what weconsider to be the 10 most common mistakes in fleet management. Over the years as a fleet manager, I know I've been guilty of at least 3 or more. How many will you own up to? Mistake #1: Having more cars than you need.This is a simplemistake. If you have 75 cars, but you only need 65.....then sell 10,put the money in the bank, earn the interest and save the depreciation.Try using your resources more intensively through aggressiveutilisation practices and keeping the cars on the road more often. Thetricky bit is....what is your optimal fleet size? You'll need goodquality demand (from drivers) and utilisation (trips made by cars) data.Mistake #2: Offering vehicles as a soft perk to employeesNowadays,the tax benefits to employees (and organisations) of vehicle ownershipare very marginal. Often, a salary packaged vehicle is given as astatus symbol, as an inducement to long term employment (i.e.employeessign up for a long term lease) or simply because its how theorganisation has historically attracted staff. Try thinking outside thebox and offering other travel related benefits - and if you must godown the route of tax effectiveness, look at the deductibility of long term public transport tickets. .Mistake #3: Centralising fleet costs rather than allocating them to each department.Ifyou're running an organisation where fleet costs are centralised,there's a distinct lack of incentives on the part of individualdepartments to make fleet savings as they never get the benefit. Its a tragedy of the commons. Why not charge each department for each vehicle? Or for each trip?Have you thought about making your fleet management function a profitcentre?Mistake #4: Buying the wrong type of car at the wrong time of yearManufacturersbring out many different variants for each model. Some have betterresale than others, and its up to you to find out. For instance, a latemodel Toyota Yaris Hatchback will trade at a substantial premium to theless popular Sedans, which were more expensive than the hatch in thefirst place. The difference in this case could be more than $2000 percar. Mistake #5: Buying a car late in the model cycle. Resalevalue for end of life vehicles (i.e vehicles that are the end of themodel life) tend to be much lower than for vehicles at the beginning oftheir model life. If you're buying a car and the model is long in thetooth (model lives vary from 5 to 10 year cycles, depending on themanufacturer), chances are you'll get a poor resale when you come tosell the car. Expect a lower price of anywhere from 5-15%for a latemodel resale. Mistake #6: Letting drivers get speeding or parking fines that can't be allocated to direct to them personally.Unpaidspeeding and parking fines for organisations 'escalate' much fasterthan they do for individuals. For instance, if you don't quicklynominate a driver for a speeding vehicle in Queensland, the fine canescalate to upwards of $3500 for every single incident. Mistake #7: Paying drivers excess for at fault accidents.Driverswho know they'll pay if they have an accident tend to drive a bit morecarefully than ones who assume the organisation will wear the cost.Make it clear to your drivers that any at fault accidents - they paythe excess. You bend it, you mend it. Your accident rate will go down, and so should yourinsurance premiums. Mistake #8: Entering into poor financing arrangements.Novatedleases, finance leases, corporate hire purchase, chattel mortgages,operating leases...Yes, it's complex. Some finance arrangements havesevere penalty clauses for early payout, which can increase theeffective financing rate by up to 50%. Get professional advice,multiple quotes and learn how to check your payment schedules. Mistake #9: Manual administration of tasks more easily performed by a computerSickofmanually typing in fuel receipts? Hate allocating tolls to vehiclesone by one? Hate making paper based bookings of vehicles? We recentlyspoke to one organisation who had 3 full time staff managing thebookings for 90 vehicles. Get a systemthat can automate these simple tasks, and you'll be surprised how muchtime you free up.. Mistake #10: Failure to maintain detailed insurance claim history.Ifyou've been managing your fleet for a while, you should have a detailedinsurance claim history you can use to compare how much premium youpaid with how much your accidents cost your insurer. At the very least,a detailed history will enable you to get better pricing on yourinsurance.For solutions to these common mistakes, visit Fleetcutter.com and request a consultation.
The,Most,Common,Mistakes,Fleet