When operating a business which runs a commercial fleet, there are several mistakes which companies can make. These mistakes can prove very costly, and in a competitive business environment could have severe consequences to the overall business.
To avoid some of the biggest mistakes, it can be very beneficial to ask the following questions before rushing into expanding a commercial fleet. If after these questions, investing in expanding your commercial fleet still looks like the best course of action for your business, then you know you have been sensible in your decision and explored other options.
Is expanding the right choice at all?
While it may seem that merely having more vehicles on the road is the easiest way to improve productivity and efficiency, that may not be the case. Vehicle tracking systems have been shown to have a significant impact on a range of areas within a business operating a commercial fleet. By installing these telematics systems within your current fleet, you could save money not only on the cost of buying additional vehicles but also in the overall running costs of your existing fleet.
Companies which have installed vehicle tracking have seen significant reductions in fuel and maintenance costs. Furthermore, fleet managers can see the live location of every vehicle within their fleet at any time. This allows vehicles to be identified to respond in case of an emergency. It also allows managers to identify where time is being lost or wasted with routes taken by drivers. This not only improves efficiency and productivity but can improve customer service as well.
A fleet management and asset tracking system could provide the improvements your company is looking for without the considerable expense of investing in additional vehicles.
Can your budget afford it?
If you still believe that purchasing additional vehicles is the way to get the most out of your commercial fleet, making sure your budget can handle the cost is vitally important. As with any vehicle, the initial purchase cost is not the only thing to factor into your budget.
The maintenance costs of commercial vehicles can often be higher than that of personal vehicles as the miles covered by a commercial vehicle can that much greater. There is also the fuel and insurance costs to keep in mind. Another recent development which any business currently operating, or even thinking about expanding, a commercial fleet should keep in mind is the introduction of Ultra Low Emission Zones (ULEZs) in cities such as London. Entrance into these zones for commercial vehicles such as lorries which fail to meet emissions standards can be £100 per day. The cost of entering these ULEZs multiple times can quickly mount and may become too high to justify.
As with any business decision, if the finances don’t add up, you should look for an alternative solution or hold off until the money is available.
Is buying a new vehicle the right choice?
Having checked over the numbers and found that there is money available in your budget to cover the cost of expanding your commercial fleet, the temptation can be to walk to the nearest garage and pick out a shiny new vehicle. There are advantages to this, as mentioned above, with the introduction of stricter emissions regulations in big cities, a new vehicle is likely to comply with these regulations. A new vehicle will also likely come with the latest technology and safety features.
There are, however, issues with buying a new vehicle. Firstly, as with any new vehicle, a significant amount of money is lost the moment the wheels drive out of the dealership in depreciation. Secondly, the advantages of a new vehicle may not be as significant in areas of the country without emissions regulations. As such, the expense of a new vehicle in comparison to a used one can be hard to justify.
The range of used vehicles available in today’s market is extensive. Also, the savings which can be made on the initial purchase cost can be extremely valuable even on vehicles just a few years old. No matter where your business is based, asking around to find out if people know any garages or dealerships which have good used cars for sale could prove very valuable as you could save a significant amount of money. Also, don’t be afraid to look a little further afield to find a good deal, if your business is based in Edinburgh it can be worth looking into the used cars Aberdeenshire has on offer. You may find prices are lower outside more prominent cities.
Is buying at all the best choice?
Having already established it would be beneficial for your business to expand its commercial fleet, there is another way to do this without buying a new or used vehicle outright. There are numerous companies which offer other businesses the ability to lease commercial vehicles for set monthly payments.
One advantage to this is you have access to a range of vehicles which are up-to-date and well equipped. There may also be the ability to upgrade the vehicle to a bigger model, depending on the company and terms of the contract. From a business point of view, there is also no need to worry about depreciation as there would be with buying a new vehicle outright.
There are often mileage restrictions placed on the vehicle your company leases, however, so it is vital to keep this in mind when looking to lease a commercial vehicle. Furthermore, a deposit is often required every time you lease a vehicle, and the cost of this can increase quickly with multiple vehicles.
By asking yourself these questions and examining just what your business needs from a commercial vehicle, you should be able to make an informed decision on what route is best to take for your commercial fleet. Good luck.