How to Smash Operating Costs

| January 22, 2009


Are you burdened with petty pilferage, unauthorized fuel purchases, vehicle neglect and low driver productivity? How do you relieve your drivers of the burden of operating a company car, monitor their habits to protect yourself, and save money that is going in the trash?

Each year about 25% of all fleet vehicles are involved in an accident. The average cost of the direct damage is $1400. Who knows what the indirect costs of downtime, increased insurance premiums, medical bills, workers compensation, morale, and even jury awards are?

1.    Does your purchasing policy mandate which type of fuel to purchase? Can your driver include personal items like coffee on the credit card charge slip without your knowing about it?

A fuel card can solve your problem by monitoring exactly what your driver purchases at the gas station. The card system captures data that identifies drivers who violate your policies.    Your driver runs his or her personal ID number, the odometer reading of the car and other information through the point-of-sale terminal. You’ll then know the time, date and place of purchase, how much and what type of gas your driver purchased, and the miles per gallon, so you can check if the driver is using the card on another non-company car. The gas card costs about $2 monthly per card.

2.    Do you have a service arrangement with a fleet management service facility to ensure your vehicles are maintained at regular intervals to maintain their resale value?

3.    The obvious annual driver’s license check verifies driving records of your drivers. What is your policy toward drivers with marginal driving records or those who receive more than one violation per year?

4.    Would it make sense to sell your company cars at attractive prices to the drivers who have taken exceptional care of them when you’re ready to change vehicles? How much money will you save over the life of owning the car when your drivers have that incentive?

5.    If your driver is responsible for an accident that could have been prevented can you “fine” them? Why not, as long as you continue to publicize the policy and the driver knew about it way in advance of the preventable accident.

6.    Are your drivers well trained how to react in case of an accident? Does each car have a camera?

Your driver’s are an important asset to your company. Your drivers are in control of important assets of your company. Communicate with them as partners. After all they’re responsible for big bucks for both your vehicle and insurance costs. (Manuscript from CFO Magazine)

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