Travel can be a very significant cost to businesses and organisations. Vehicles, whether hired or purchased outright, almost always represent significant financial outlay. Then there are the costs associated with running and maintaining those vehicles, including tax, insurance and fuel.
Other forms of transport costs, for example taxis, public transport and flights, often cannot be avoided in order to fulfil customer commitments or to exploit new business opportunities. Cost reduction measures here will include things like setting limits on travel spending and shopping around for savings.
This article focuses on vehicle-related travel costs. We’ll explore a variety of different ways for businesses to reduce their vehicle-related travel costs and keep expenditure under control.
Key Travel Costs for Businesses and How to Reduce Them
Many organisations operate vehicles, ranging from employee company cars all the way up to light and heavy commercial vehicles. Some choose to own them outright, while others use leasing arrangements or hire purchase.
However they are paid for, vehicles often represent a substantial cost for businesses. Here are some ideas on how to reduce the outlay:
- Conduct comprehensive research to uncover the best deals available
- Try to standardise the fleet – adopt just one or two vehicle choices to increase economies of scale and buying power
- Be aware of emissions regulations and ensure your vehicles are fully compliant and future-proof, to avoid incurring further costs later
Vehicle Running Costs
- Choose vehicles based on whole-life costs, rather than just the initial price – consider how much maintenance they are likely to need
- Encourage fuel-efficient driving. Some key tips to achieve savings:
- Better use of gears – change gears early and keep engine revs low
- Reduce speed – higher speeds consume more fuel
- Keep tyre pressures correct – make drivers responsible for frequent checks
- Limit air conditioning use where possible to high-speed driving. At speeds below 40mph it’s more efficient to open a window
- Lighten the load – remove any cargo, roof racks or roof boxes when not in use as they can increase fuel consumption by as much as 30%
- Cut idling – if the engine is going to be off for three minutes or more, turn it off to save significant amounts of fuel
Petrol and diesel are major contributors to fleet costs, which is why businesses have to do everything they can to keep spending under control. They can do this in several ways:
- Choose fuel-efficient vehicles and select the appropriate vehicle size
- Invest in telematics to track driving, particularly for larger fleets
- Think carefully about petrol vs diesel when choosing vehicles – don’t just automatically assume one or the other will work out cheaper in the long run
- Use business fuel cards as a method of payment. Companies using fuelGenie benefit from all of the following savings and operational advantages:
- Savings of 3p+/litre by directing drivers to low-cost supermarket petrol stations*
- Free to own and use
- 24/7 online dashboard for easy management and admin – including usage tracking
- HMRC-approved invoices for easy VAT reclaim
- Up to 45 days of credit with no minimum spend
- Unlimited number of free fuel cards
- Drivers can also gain personal reward points using supermarket loyalty cards
* The “over 3 pence per litre” saving message is based on the difference between the published Government Weekly diesel fuel prices and the price paid per litre for diesel by fuelGenie customers for the comparable period. Over a 16-month period (02.01.2017 – 02.04.2018) fuelGenie customers buying diesel at Tesco, Morrisons and Sainsbury’s saved an average of 3.2 pence per litre when compared to the Government Weekly road fuel prices