Looking to minimise your fleet costs?

Managing vehicle costs and maximizing value requires a broad view—considering cost and value from the outset. Fortunately, opportunities to save and add value exist throughout fleet management.

The NZTA recommends three ways to achieve more efficient business travel management:

• Reduce the amount of travel
• Improve the efficiency of the travel
• Reduce the cost per kilometre of travel

When it comes to fleet management there a number of ways to achieve these goals and enjoy the cost savings they offer:

• Think through your mobility needs before considering your vehicle needs
• Review your vehicle policies in the context of all mobility options to minimise vehicle use
• Replace vehicles at the optimum time to maximise value and minimise costs
• Choose vehicles on the basis of their total cost of ownership over their useful life
• Make vehicle and fuel choices on the basis of needs and profitability not vehicle desires
• Employ the latest vehicle tracking and management technology to identify savings
• Make full use of the data and information that new technology offers
• Ensure that you are aware of advances in technology that can offer you cost savings
• Embrace new vehicle technology and the savings it can offer through greater efficiency

Mobility versus fleet management

Before diving into vehicle management, take a step back and ask: What purpose do your vehicles serve? Simply put, they help move your people and the tools they need to where they need to be.

But needs evolve. Advances in technology and transport infrastructure may have already affected your vehicle requirements—whether you’ve noticed or not.

When reviewing your fleet strategy, think mobility first. By rethinking how you move, you can reduce costs and unlock greater value—without compromising productivity. It could be that your transport needs can be reduced with a little help from technology:

• How many times do your staff actually need to meet personally with clients? Perhaps, you can reduce the number of client visits in favour of video calls to reduce transport costs. There are many cost-efficient alternatives to business travel.
• Is there technology or software that could be deployed to monitor products or services? Perhaps, remote monitoring can reduce the need for technicians to visit clients.
• Have public transport options improved to the point where staff can make use of them for your business’s needs? Maybe, reps in urban areas no longer need their own vehicle because of eScooter options or improved train services.
• Could allowing staff to work from home for a portion of their working week reduce their transport needs? New communications technology reduces the need to be in the office to do your job.

If you live in Auckland, you are acutely aware of the potential impact of changes in transport infrastructure on your business. Have you considered how major government-led infrastructure projects such as the City Rail Link, second harbour crossing, Northland Corridor, or Eastern Busway might affect your mobility and transport needs? 

Every business is different, but the key is to clearly understand your mobility needs and explore ways to reduce transport wherever possible.

Reviewing vehicle policies

Do you have a workplace travel plan? According to NZTA, one of the top benefits is reduced business travel costs. By clearly understanding your mobility needs, you could unlock more cost-efficient travel through options like:

• Reduced direct travel costs
• Reduced mileage claims
• Reduced staff downtime related to travel times
• Reduced fleet running costs
• Improved image because of reduced emissions

There’s a reason reducing fleet size and cutting kilometres travelled are the top two items on Fleet Financials’ list of ways to reduce fleet costs.

You might find that you need fewer vehicles simply by encouraging staff to use public transport where practicable, think carefully before they grab a pool car and consider ways to share vehicles. Reviewing vehicle eligibility and exclusive access policies can also reveal hidden savings. While these changes help reduce emissions, they’re just as powerful for improving your bottom line.

Optimal vehicle replacement

Minimising fleet costs is not just about minimising the number of vehicles and their use. Its also about ensuring that vehicles are replaced at the optimum time.

Older vehicles are more expensive to run. As vehicles age their operating costs – fuel, servicing, downtime related to servicing, out-of-warranty repairs, etc. – increase. And, as the trend is for vehicles to become more efficient over time, the cost associated with fuel is compounded by lost savings, which a newer vehicle would have offered you.

But aren’t they less expensive to own? Yes. Depreciation costs will reduce over time. And your vehicles’ monthly loss in value – through reduced used-vehicle market price – will also reduce over time.

The trick here is to determine when running costs are increasing faster than capital costs are decreasing. This is when the vehicle starts costing you more money than it should. Accurate planning for vehicle replacement is the key to minimising vehicle fleet costs.

Total Cost of Ownership: A Smarter Way to Assess Value

When replacing vehicles, it’s essential to look beyond just purchase or lease costs. Focusing only on upfront price gives a limited view of a vehicle’s true value.

Instead, consider the total cost of ownership—including fuel, maintenance, servicing, and resale value. A cheaper vehicle might cost more over time due to lower fuel efficiency or limited warranty. On the other hand, a higher upfront investment—like in electric vehicles—can deliver long-term savings through lower running costs.

To make the best decision, always assess the full lifecycle cost of any vehicle.

Fuel and vehicle choices

Choosing the right vehicles and fuel types is key to reducing both emissions and costs. When you align your fleet with your actual needs, long-term savings follow.

Here are three essential questions to guide your decisions:

1. What fuel is right for your fleet?
   While petrol and diesel have been the norm, electric vehicles (EVs) are becoming increasingly viable thanks to lower running costs and improved range.

2. Can EVs reduce your costs and emissions?
   If your fleet includes vehicles for short urban trips, EVs or hybrids could be ideal. They offer a practical, cost-effective alternative—especially where full EV range may be a concern.

3. Are you choosing vehicles based on needs or habits?
   Avoid defaulting to familiar brands. Instead, compare total ownership costs and explore leasing options—less popular brands often come with better deals.

Tip: Prioritizing needs over preferences and focusing on total cost of ownership can significantly boost your bottom line.

Cost saving initiatives

We’ve already seen how technology—and EVs—can cut costs. But there’s another powerful tool: telematics.

By tracking vehicle movements and driver behavior, telematics helps you:

• Identify inefficient routes
• Reduce idle time
• Improve driving habits
• Lower fuel and maintenance costs

Even small changes can add up. For example, just one hour of idling can burn up to 2 litres of fuel and cause wear equivalent to 40 km of driving. Over time, that’s a significant cost.

With insights from telematics, you can make smarter decisions, boost efficiency, and unlock real savings across your fleet.

Fleet data management

Telematics makes it easy to collect fleet data—but the real value comes from using it. Data without action leads to missed opportunities.

To get the most from telematics:

• Go beyond reporting requirements.
• Use insights to reduce idle time, improve routes, and boost driver efficiency.
• Focus on meaningful metrics that drive smarter decisions.

Tip: Set your team up to not just gather data, but to act on it. That’s where the real savings begin.

Looking Ahead: Smarter, Leaner Transport

Autonomous vehicles may not be mainstream yet, but they’re on the way—reshaping how we think about transport and reducing the need for vehicle ownership.

Even now, embracing new technologies like EVs can future-proof your business. While the upfront cost may be higher, the long-term savings and efficiency gains make it worthwhile.

That’s why we believe EVs are a smart investment—and why updating older vehicles sooner could pay off.

Overwhelmed by all the factors you need to consider?  Contact our fleet management professionals to explore ways to optimise your fleet.