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8 tips for Total Cost of Ownership (TCO) optimisation

posted on 07/07/2023
  • Overview
  • Why is TCO important?
  • 8 tips for optimising TCO
  • How can Alphabet help?

If you're responsible for managing a fleet, you know just how critical it is to keep a tight rein on costs. A major part of this task involves understanding and optimising the TCO of your vehicles.

TCO isn't just about the purchase price of a vehicle; it encompasses everything from fuel and maintenance costs to insurance and depreciation. By managing these factors effectively, you can streamline operations, reduce costs, and increase the efficiency of your fleet.

8 tips for optimising TCO for your business

Keep in mind that TCO optimisation is an ongoing process which requires continuous monitoring, analysis, and adaptation. These tips are not one-off tasks but strategies to be implemented and refined over time. With these in hand, you are well-equipped to boost the efficiency and profitability of your fleet.

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1. Choose fuel-efficient vehicles

The type of vehicles in your fleet play a significant role in your TCO. Opt for vehicles with high fuel efficiency (including considering EVs) to reduce fuel costs, which typically make up a significant portion of your variable costs.

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2. Optimise vehicle specifications

Ensure that you're not over-specifying your vehicles (and thereby adding unnecessary costs). Choosing vehicles with the optimal balance of features and specifications to suit your business needs can help minimise your TCO.

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3. Use a fleet card to identify fuel and charge efficiencies

Simplify the tracking and payment of expenses by using a fleet card for all fuel expenditures. This collects, records, and reconciles every transaction, saving administrative time and providing valuable data to identify opportunities for fuel savings initiatives.

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4. Adopt preventative maintenance strategies

Regular maintenance can help avoid costly, unplanned breakdowns and repairs. By keeping your vehicles in top shape, you'll extend their lifespan, increase safety, and reduce the overall TCO.

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5. Use telematics and fleet management software

These technologies help your journey planning and provide valuable insights into how you can improve efficiency and reduce costs.

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6. Train drivers to save fuel

Your drivers' behaviours can have a significant impact on fuel consumption. By training drivers to avoid rapid acceleration, heavy braking, and excessive idling, and ensuring they use journey-planning tools to optimise distance and speed, you can reduce fuel costs and lower your TCO.

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7. Encourage a safe driving culture

A safe driving culture not only reduces the risk of accidents but also keeps insurance costs low. Implementing effective driver training programs can help foster this culture within your organisation.

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8. Be strategic about purchase and resale of vehicles

Vehicle depreciation is a major factor in TCO. By purchasing and selling vehicles strategically – at times when you can achieve the lowest capital cost and the highest value at resale – you can minimise depreciation costs.

Our expert team offers comprehensive TCO consulting services, designed to support you in managing all aspects of your fleet expenses.

Get in touch with our expert team today on 01252 976 010 to discuss how we can help you gain a transparent view of your costs, improve efficiency, and boost the profitability of your fleet.

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