Running a fleet-based business in the UK was always financially challenging. But with Reeves’ budget changes and the risks of operating somewhere like the capital, things have never been more difficult. With so many rules and regulations, it’s almost impossible to thrive in an environment like this.
Fortunately, strategies for success are still available. Many fleet-based businesses continue to operate in spite of the challenges they face. It’s just a question of knowing the right tactics and getting them right on a daily basis to remain safe and compliant.
So, what are the top fleet companies doing to succeed?
Mastering DVSA compliance
One of the top priorities right now is to master Driver and Vehicle Standards Agency requirements. Trying to get on top of these manually is almost impossible, but new technologies are making compliance more feasible.
The easiest way to comply is to use smart tachograph version 2. These are mandatory on new vehicles but can be fitted to older vehicles. These improve visibility and enhance reporting in a way that satisfies the requirements of the authorities.
The risks of non-compliance are enormous. Businesses that don’t satisfy the requirements are at risk of £1,500 fines per vehicle, per offense, which is a figure that can grow exponentially, especially if left unchecked.
Accelerate EV transition
Another thing you can do to reduce risks as a fleet-based business is accelerate the EV transition by using salary sacrifice schemes. The government is planning to increase the benefit-in-kind tax only slightly in the coming years, meaning that the BIK taxes on EVs are incredibly low, almost negligible in a lot of cases.
This means that you can actually pay your people more if they;re willing to accept an EV benefit of some kind or another. These benefits are highly beneficial and can be a great way to pay higher salaries without your employees also being required to relinquish a lot in taxes. It might sound small, but it can make a big difference overall.
Implement telematics
If you can implement telematics systems, you will also find yourself saving a lot of money overall. In the past, fleet managers had no real way of monitoring how employees were treating their vehicles. They just had to trust them, or wait for several thousand miles before observing the damage.
But with telematics, you can get on top of issues quickly. These systems tell you when drivers are braking hard, idling or driving recklessly, enabling you to intervene immediately, often in real-time.
What’s more, if you have van fleet insurance, these systems can lower your premiums. Insurers love them because it lets them see how vehicles are being driven, enabling them to adjust their risk scores substantially.
In the UK, there are also sometimes legal compliance requirements for these systems on commercial vehicles. Depending on the vehicle class, it may be mandatory to install telematics that can offer limited functionality across a range of domains. Many fleets save tens of thousands of pounds off their insurance bills because of these policies.
Adopt flexible leasing
Many companies make the mistake of adopting rigid leases when operating fleets. However, these lock you into a specific number of vehicles and can make it harder whenever you enter Low Emission Zones (which are in many cities across the country today).
Because of this, many operators are discovering that short-term rentals are usually the superior option. These cut the amount of commitment while also offering the flexibility that many businesses require to satisfy their operational requirements.
Furthermore, some of these leasing options may also allow you to get around Euro 7 emissions rules. This ability to sidestep this additional cost is exceptionally valuable in businesses running more than around 5 vehicles at a time.
Prioritise preventative maintenance
You can also cut down on fleet-based risks by focusing more on preventative maintenance. The DVSA now has what it calls the Operator Compliance Risk Score, which is a method it uses to track maintenance compliance. Non-compliance can lead to fines of more than £500, so it is always worth scheduling MOTs and following advice from telematic systems (since these often have invaluable data on what you need to improve).
Ideally, you want to maintain green service across the board. Failing to do so could mean higher repair bills in the future. You could also add aftermarket software to your business vehicles for additional monitoring and number crunching, telling you ahead of time when you need to service a vehicle.
Secure against EV repair surges
If you decide to go down the EV route, you’ll also want to secure against the issue of EV repair surges. These occur when you suddenly have to fork out a bunch of cash for fresh batteries and don’t even get a new vehicle at the end of all that spending.
If you can link EV battery replacements to your telematics policies, that’s generally a good move. Sometimes, providers will agree to lower discounts on replacements if you sign up for their schemes in advance.
You should also do things like cover over-voltage and get the proper insurance on battery components. Failing to do so leaves you at a much higher risk than you might expect.
Use fuel cards
Another way fleets can reduce their risk is by leveraging fuel cards. These actually reduce the cost of fuel at many gas stations between 3% and 9%, leading to massive annual savings every year. The amount of cost you can avoid by using this method goes up the more your drivers drive and use their cards.
Just make sure you rig the game so that fuel cards are the only way your people can pay for their fuel. This way, you can continue benefiting from savings and then use that additional money to invest in other things you want.
So there you have it: how fleet-based businesses are making their enterprises more profitable today. Following these strategies should help delivery companies, service brands, and mobile operators generate more profit.
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