Company vehicles are valuable assets that enable workers to do their jobs safely and efficiently, but their expenses can vary based on driving habits, maintenance and the car itself.
Here are seven simple tactics to help businesses save money on their company cars and get the most out of every mile.
1. Focus on Vehicle Size and Lifespan
Choosing the right vehicles will save the most money in the long run. Many factors influence a car’s value, but companies should primarily focus on size and lifespan during their search.
Smaller sedans are often less expensive than trucks, vans and SUVs because they’re lighter, have better gas mileage and require cheaper insurance. These factors have never been more important with current gas and vehicle prices.
However, a vehicle’s size doesn’t always impact its lifespan. Some larger cars, such as the Chevrolet Suburban and Honda Odyssey, last a long time. Despite their above-average size and poor mileage, they would make great company cars because they can realistically last for decades.
Companies don’t need to wait 10 or more years to replace their fleets, but cars with great longevity will save money in the long run. The cost of new vehicles increases yearly, so it makes more financial sense to look for cars that won’t require frequent upgrades.
Businesses also need to consider workers. Companies that employ many parents and older people may want to choose family-oriented SUVs. Startups with a relatively young workforce might find sleek sedans suit them better. Perhaps a mixture of both vehicle types is necessary. Car shopping is a balancing act that will get easier with each purchase.
2. Estimate Fuel Consumption
Businesses must also account for the estimated time vehicles will spend on the road. This task is more important now than ever due to high inflation and gas prices. Employees should keep time and mileage logs to track their fuel consumption. Their records will provide a good estimate of each car’s expenses.
Companies should consider rotating vehicles between employees so they all get equal usage if one is eating into their budget. The model itself might also be the problem, so it might need to be traded in to improve vehicle options.
3. Compare Buying and Leasing Options
Businesses requiring a lot of travel might find it more cost-effective to lease vehicles instead of purchasing them. They’ll have to deal with certain restrictions and renewal plans, but those expenses pale in comparison to ongoing maintenance fees. Companies should compare buying and leasing options and determine the cheaper long-term option.
They should also consider buying used cars that are often thousands of dollars cheaper than the newest models. Late-2010s cars have enough modern features and capabilities anyway. Companies don’t need to overspend on new vehicles if they don’t have to.
4. Skip the Extra Features
Automotive dealers will attempt to persuade buyers to pay more for fancy car features. Companies should ignore their sales pitch and stick with the basic models. Employees don’t need extra cupholders and self-opening trunks to do their jobs.
The same advice applies to extended warranties. Many offered by dealers have poor coverage and cost much more than insurance policies from actual providers. A commercial auto insurance plan is all the protection that’s needed.
5. Get Tax Relief
Companies can get multiple tax benefits from their vehicles if they play their cards right. Electric cars used strictly for business are eligible for tax breaks. However, operations that want a considerable amount of tax relief may have limited options. They may have to sacrifice other perks, like mileage or longevity.
6. Take Maintenance Seriously
Consistent maintenance is a must for saving money on company cars. Major repairs far outweigh the costs of short-term maintenance. These items should be at the top of an upkeep to-do list:
- Get regular tuneups: People should consult the owner’s manual for the recommended tuneup time frame and stick to it. Regular tuneups promote longer lifespans and identify minor problems before they snowball into more severe mechanical issues.
- Change the filters: Staff should check each car’s air filters every month and clean or replace them if necessary. A clean filter helps maintain good engine health and gas mileage.
- Replace the liquids: Most vehicle fluids get replaced at least once every three years. Oil, engine coolant, transmission fluid, brake fluid and clutch fluid should be checked regularly. Companies should not procrastinate if one of them needs replacing. They should keep the car healthy and refresh the fluid as soon as possible.
- Check the tires: Companies should ensure all tires are properly inflated and have balanced tread. Driving on underinflated or uneven tires often leads to poorer gas mileage and might damage the car’s suspension system.
- Monitor fuel efficiency: Managers should closely monitor any changes in each car’s fuel efficiency. A sudden decrease could mean something more serious is wrong with the vehicle.
Scheduling tune-ups is the company’s responsibility as the vehicle owner, but other simple maintenance tasks can be delegated to employees. They should perform the filter, fluid and tire inspections and log their findings.
Tire maintenance and balancing are especially important, as poor tires are one of the leading causes of accidents and can multiply maintenance costs in a hurry. There should be a tire-changing guide in each vehicle so employees can make quick repairs on their own.
7. Promote Good Commuting Habits
The workforce will largely determine how much money the company saves on its vehicles. That’s why promoting good commuting habits and discouraging wasteful driving is crucial. Managers should discuss carpooling as a commuting option to combat high gas prices and reduce fuel consumption.
Gas-saving strategies also belong in the discussion. These efforts will help workers get the most out of each tank:
- Accelerate gently. Don’t floor the gas pedal.
- Watch the flow of traffic to anticipate slow-downs and avoid sudden stops.
- Maintain a steady speed on highways.
- Don’t let the car sit idle for too long.
- Stay within the speed limit. Driving at 70 mph consumes up to 30% more fuel than at 50 mph.
Employees should receive frequent reminders to practice these fundamentals and ask questions about their driving habits. An educated workforce will take a lot of the micromanaging off the company’s plate and allow it to focus on other ways to save money on its vehicles.
Make Every Car Count
Company cars are only worth the expense if businesses acquire the right vehicles and take good care of them. Those tasks are easier said than done, but organizations must be prepared for the responsibility if they want to mobilize their workforce. They should employ these tips when accumulating their fleets to save money and make every car count.