Five ways that telematics can cut fleet costs
While telematics generally involves an upfront expense, the financial benefits can be seen very quickly. In fact, our global telematics partner, Geotab, suggests a return can be achieved in as little as a month, with fleet managers seeing 15% to 20% savings on their costs. In this article, we look at five of the ways that you could potentially save money with telematics.
1. Reducing business expenses
While you may have detailed budgets for your fleet, they will normally be based on historic data (or educated guesswork, in some cases). With telematics, you have live vehicle data that you can use to generate actual operating expenses to compare with your budget. As well as potentially spotting money you can clawback if there’s a mismatch, you might be able to identify outlier expenses that you can cut and find ways to increase productivity.
2. Saving on insurance costs
Telematics can save you money on your insurance bills, as it tells you all about what your drivers are doing. Identifying bad behaviours, such as aggressive driving, is the first step in stopping them. Combined with driver training, telematics can help to reduce the number of expensive accidents or collisions in your fleet – and it then gives you the data to demonstrate the improvements, which you could use to negotiate reduced premiums. What’s more, if there is an incident of any kind, telematics can give you a detailed analysis of it, which can be provided to your insurer or even used in court.
3. Cutting maintenance costs.
A big part of fleet maintenance is making sure it is carried out when necessary. If you do it too often, you’ll end up paying more than you need to, while leaving it late can lead to bigger costs if vehicles are off the road. With telematics, you can track the actual odometer and engine hours from each machine, so you can schedule maintenance for when it is needed. Diagnostic reporting even offers you a way of spotting maintenance patterns in vehicles, so you may be able to respond to some problems more quickly, which may allow a more cost-effective solution. You can also use the analysis of driver behaviour to cut maintenance costs in some cases. For example, identifying and training drivers who regularly brake harshly could lead to brake pads lasting longer.
4. Making savings through better vehicle distribution
With telematics, you can closely monitor how your vehicles are being used. This can help you ensure you have the correct number of vehicles for your needs – and identify trends that might suggest whether short-term or long-term additions to your fleet would be more cost-effective. By tracking distance travelled or engine hours through your telematics, you can also measure the productivity of each vehicle, so you can identify the optimum time to dispose of them. It will also highlight any areas of inefficiency that could allow vehicles to be redeployed more effectively somewhere else.
5. Cutting fuel costs
Fuel costs are big part of fleet expenses, and whenever an engine is idling it will be costing you money. With telematics, you cut reduce fuel costs by as much as 14% (according to analysis from Telematics Wire). By identifying how and when idling occurs, you can adapt your driver policies to provide better guidance about when engines should be turned off and develop driver training that leads to better behaviours. With our telematics solution from Geotab, you can even set reminders for drivers to warn them about idling and encourage them to save fuel.
To find out more about telematics, and overall risk services please visit our Fleet Risk Zone – or speak to your LeasePlan Account Manager to find out more.