Company Cars: How to Reduce Your Business Transportation Cost

One of the biggest expenses of many businesses is the transportation of their staff. If you are looking to save money and streamline the operations of your business, assess the outgoings of your corporate car department could be a great place to start. Below is a guide to some simple changes you can make which will help to make issuing and using company cars much cheaper.

Reduce the mileage covered

The cost of using company cars is directly related to the number of miles covered by your staff in those vehicles. More miles equals more fuel. It also equals more wear and tear on the vehicle itself, which means it is going to need more frequent servicing and repair work, all of which increase your costs. The easiest way to reduce the cost of using company cars is to reduce the number of miles your employees cover in them. For example, rather than asking a sales rep to drive 500 miles to have a face-to-face meeting with a customer, you could instead suggest that they connect using video conferencing equipment.

Sign up for a business fuel card accounts

The primary expense faced by a company which hires self-drive corporate cars is fuel related. The cost of fuel is increasing, with increases of 20 cents on the litre reported in 2017. Fuel card schemes are offered by oil companies. They will often allow your staff to pay a reduced price at the pump, providing that they are using a gas station which is part of the fuel card scheme. Using a field card scheme will also make monitoring and paying for each staff members fuel much easier. At the end of each period, you will receive one bill you need to pay. However, this bill will also contain a breakdown of each individual fuel card and the fuel it has purchased. This means your staff do not need to carry money with them and they do not need to claim the cost of fuel back as an end of month expense.

Retain an ageing fleet

It is likely that a transportation manager will always be pushing to upgrade the vehicles in the company fleet. However, modern cars can last many years so replacing them too soon can increase your operating cost while offering no major benefits. You should instruct your transportation manager to maintain an ageing car for as long as possible before it is replaced with a new model.