What's the total cost of your company's vehicles?

Australia has never been the most friendly market for purchasing a new car, whether you're an individual driver buying one or a corporate fleet manager who needs a few dozen. In either case, it's expensive. Drive.com, drawing upon Deutsche Bank research, reported that if you purchase a new Volkswagen Golf for $23,000 in Tokyo, that same car would set you back $34,000 in either Sydney or Melbourne. That's a staggering difference.

The expense of a fleet of vehicles includes a lot more than just buying the cars.

If you're a fleet manager, initial vehicle costs are only one piece of the puzzle. The truth is that the expense of a fleet of vehicles includes a lot more than just buying the cars. There are numerous other factors that weigh on the overall cost of ownership for each vehicle, and they all must be taken into consideration.

So what's the real cost of your cars?

It would be great if the initial purchase price were the only cost of your company's vehicles, but that's never the case. The total cost of ownership includes a lot of other components - among them fuel, tyre changes, maintenance, repairs, taxes, insurance and various fleet maintenance operations. The car that appears cheapest at first isn't always cheapest in the long run, meaning that initial price tags can be deceiving.

Many of the long-term expenses are fairly well fixed, but there are a few specific ways in which your fleet management team can improve in terms of cost-efficiency. For example, are you using regular fuel, or premium? The cost-effectiveness of each option is likely to fluctuate as market prices for petrol change, which means you may need to adjust your purchasing plans in real time. Additionally, you should consider your maintenance strategy - will you take care of your vehicles in-house, or outsource that process? It depends which is better for your bottom line.

Calculating your vehicles' true efficiency

To get the total cost of your vehicles, you need to add up everything, including purchase price and car fuel consumption and everything else. However, as Business Fleet correctly noted, even that doesn't tell you the full story, because lifecycle cost is useless when expressed in total dollars. Say a given car costs you $100,000 - what are you getting for that money?

What's the real cost of all your company's cars?What's the real cost of all your company's cars?

A better metric, therefore, is a vehicle's productivity on a per-distance basis. How much are you spending, in cents, for each kilometre your drivers travel? What sort of ROI are you getting for that distance? Once you can answer these questions, you can make better decisions about your company's future.

Streamlining the cost management process

It's not always easy to see the full picture clearly, but one thing's for sure - fleet management software can help that picture come into focus in a big way. At Smartfleet, what we can offer you is a comprehensive solution for cost management, which should make your job far easier.

In short, what you get is a tool for comprehensive reporting that helps you make "cost of life" calculations in real time. Forget about the guesswork and the incomplete calculations - we want to tell you the straight truth about your vehicles and their impact on your company's bottom line.