Build a flatter, more predictable budget that aligns with your company’s overall objectives
It’s an aged method used in the world of fleet management – You have vehicles in your fleet that you bought years ago, maybe even a decade ago, that are driving up repair costs and downtime. You get advice from people in fleet management to identify all the vehicles above x years old and/or with odometers higher than y and replace them all within the next year. Then you realize that you’re talking about replacing more than half of your fleet in one year.
Are you financially prepared to support a plan like that? Another consideration is that fleets can experience up to a 12 percent fluctuation in annual maintenance expenses when managing replacements through age and mileage. Yet more financial uncertainty to manage.
Now is the time to look at a more innovative way to plan replacement cycling.
- Look at your fleet holistically with the goal of making acquisition and maintenance costs flatter and more predictable.
- Determine the ideal age/mileage you want your fleet to maintain in order to support your company’s overall objectives.
- Determine how many years it will take to cycle through the existing vehicles in order to reach your ideal fleet age.
- Most importantly, balance the ideal consistent replacement plan with how much the company has to spend.
With this new plan in place, capital expenses may go up at first, but maintenance expenses will go down, and as the fleet age goes down, reliability will go up. Eventually fleet expenses will reach a nearly flat pattern.
ARI’s experts can help you take control of your fleet financials in the face of changing economic conditions. They will provide the insight, tools, and support to improve how you select financing options, control operating costs, and support your organizational objectives.