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Expense Management For Small Businesses

6 Fleet Expenses And How To Reduce Them

As a business with a vehicle fleet, you may be looking for ways to cut fleet management costs. We explain major fleet expenses and how to reduce them.

logging fleet expenses

If a fleet of company vehicles is an integral part of how your business operates, then controlling fleet expenses probably requires constant attention.

As your business grows, your fleet management costs increase with it, but the relationship between the two isn’t always linear. This means keeping your fleet operations profitable requires smart analysis and decision-making and regular re-examination.

Many business owners may be missing the boat on ways they can reduce their fleet expenses. Today we’ll take a look at some of the most important types of fleet expenses and what you can do to curtail them.

Operational Fleet Expenses

Fuel fleet expenses at the pump

We’ll start our examination of fleet expenses with the costs related to your company’s day-to-day fleet operations: the things you rely on your fleet for to get the job done.

These are the costs of getting your vehicles where they need to be when they need to be there.

Gas Prices

If your business operates a fleet of company vehicles, paying for gas is probably one of your biggest expenses, and there’s a good chance it’s also one of your biggest sources of frustration.

Since electric options for the type of vehicles that most businesses need for their company fleets — like work vans — aren’t really on the market yet, most fleet managers are left at the mercy of unpredictable fluctuations in prices at the pump.

Since you can’t control the price of gas, managing this major expense depends on doing your best with the things you do have some control over, like how you pay for fuel and how fuel-efficient your fleet is.

There are a lot of strategies for cutting fuel costs that can add up to significant savings for your business. One approach many businesses benefit from is using a fleet fuel card, a specialized type of corporate credit card you give to your fleet drivers so they can fill up.

Using fleet fuel cards, you can earn discounts and rebates on your gas purchases, which can add up to serious savings. Centralizing your fuel spending on a fleet card can also save you time on administrative tasks.

When selecting a fuel card, always read the “fine print” to make sure you don’t get burned by minimum spending requirements or reward caps, and make sure the card you choose is accepted at gas stations in the area where your fleet will operate.

Inefficient Trips

Driving with GPS

As a fleet manager, you can’t really determine the destinations your fleet will have to reach. Since it all depends on where you need to make deliveries or service calls, it’s in your customers’ hands, not yours.

Just because you don’t decide where your fleet vehicles have to go doesn’t mean you shouldn’t get on top of how they get there, however. This practice is known as route optimization.

Route optimization helps your vehicles reach their destinations quicker while using less fuel. This saves you money and helps you get more productivity out of your existing fleet without needing to acquire more vehicles and drivers.

Proper route optimization requires taking into account your destinations, your deadlines, the number of stops on the trip, any necessary fuel stops, and traffic.

It’s complex, but when done right, it may save you time and money by getting the most value out of every vehicle and every trip.

Vehicle-Related Fleet Expenses

Your fleet vehicles have costs associated with them even when they aren’t out on the road making a delivery or service call. Acquiring fleet vehicles and keeping them running are significant expenses.

Now that we’ve considered what you can do to reduce your day-to-day operational fleet expenses, let’s pull back and think about some bigger-picture cost-cutting strategies centered on the vehicles your business uses and how you procure them.


Maintenance is a fleet management costs

Spending money on maintenance is an unavoidable part of owning a company vehicle fleet. Or at least, you shouldn’t try to avoid it unless you want to spend even more money dealing with the consequences.

Breakdowns can have a big cost for your business in terms of repairs, lost business from failing to meet your commitments to customers, and higher insurance premiums if mechanical problems lead to accidents.

The best way to avoid these major, unexpected expenses is by implementing a robust preventative maintenance plan for all of your fleet vehicles.

This starts with reviewing the recommended maintenance intervals from the vehicle manufacturer, but also includes accounting for the age of the vehicle, usage of the vehicle, mileage, and date since last service.

Besides preventing breakdowns, good maintenance can also save you money on gas because well-maintained vehicles are more fuel-efficient.

Payments And Depreciation

Car speedometer

Of course, we can’t consider the expenses associated with operating a fleet unless we take into account the cost of the vehicles themselves.

You also have to remember that fleet vehicles you purchase are business assets that are subject to depreciation. Unless you plan to drive your vehicles until they’re ready for the scrapyard, this is something that you need to keep in mind.

If your business is considering putting a company vehicle fleet into operation, carefully analyze whether it makes the most financial sense to buy or lease the vehicles you need.

Purchasing vehicles is a significant up-front expense, and your company is fully responsible for every aspect of operating them, from maintenance to mandatory compliance paperwork. On the positive side, you can use the vehicles as you see fit and resell them down the line.

Leasing vehicles means lower initial costs, generally less administrative overhead, and maintenance may be handled for you by the leasing company, depending on the terms of your lease.

On the other hand, some leases have mileage restrictions, and many leasing companies require you to lease a minimum number of vehicles, which means leasing may not be an option for smaller businesses.

Deciding whether buying or leasing is best for your business depends on your budget, your current needs, and your projected business growth.

Administrative Fleet Expenses

Woman going through Administrative Fleet Expenses

Any fleet manager knows that the rubber-to-road, nuts-and-bolts aspect of operating a fleet is only part of the expense burden.

We’ve previously touched on some of the administrative work involved in managing a company fleet. We’ll conclude by taking a closer look at some of those administrative aspects of fleet management and how you can reduce them.


Just like any other vehicle on the road, your company’s fleet vehicles need to be insured. It’s the law, and it protects your business, your drivers, and other motorists that your fleet shares the road with.

Many criteria play a part in determining the price you pay for insurance, including the age of your vehicles, their typical usage, and the driving record of the employees behind the wheel.

You can (and should) shop around to see which provider can give you the best rates. However, one of the best ways to save on insuring your company’s vehicles is to buy a fleet insurance policy.

Compared to buying a policy for each individual vehicle, buying a fleet policy for all of the vehicles your company operates usually ends up being considerably less expensive.

Fleet insurance is also simpler to administer because there’s only one policy that you add to or remove vehicles from, instead of multiple policies for each individual vehicle you need to keep track of.

Mileage Tracking And Reimbursement

Mileage Tracking And Reimbursement

If your employees are filling up while they’re on the road for company business, then you need a way to make sure they aren’t paying out of pocket for fuel.

Some companies use a policy of reimbursing a flat amount per mile. Other companies ask employees to save gas receipts and turn them in on a regular basis to be reimbursed.

Both of these approaches come with administrative burdens, with fleet managers having to collect mileage reports and receipts and then issue reimbursements.

A different approach that can save fleet managers time and, therefore, money is to issue employees fleet fuel cards, as we touched on earlier.

With fleet fuel cards, your employees can pay at the pump when they need to fill up — without having to keep receipts or a mileage log and then wait to get their money back.

All of the purchases appear on a single statement, so you don’t need to reconcile accounts and you know exactly how much you’re spending on gas.

Streamline Fleet Management Costs With Coast

Construction worker standing near cranes.

Controlling fleet expenses and fleet management costs requires thoughtful analysis and decision-making from business owners and fleet managers in a wide variety of areas, from vehicle lease terms to route planning.

One of the biggest categories of fleet expenses will always be the cost of fuel. The Coast fleet and fuel card helps you save on fuel while also cutting down on time-consuming administrative overhead.

Coast is accepted at any gas station that accepts Visa, has no minimum spend requirements or rebate limits, gives you access to detailed real-time reporting, and has integrations with many other popular fleet management and accounting tools.

To learn more about how Coast can help your company, visit CoastPay.com today.