How to conduct a fleet management cost savings analysis

A fleet management cost savings analysis is one of the most valuable exercises a fleet manager can take on.

It reveals where your operation is running efficiently—and where it's not. Whether you're dealing with rising insurance premiums, preventable maintenance, fuel waste or inefficient labor, your data holds the clues to reducing costs across your fleet.

Rolling out fleet management technology is a smart first move, but it's how you use that technology to dig deeper that makes the difference. With the right analysis, you can turn raw numbers into insight and insight into real, measurable savings. For example, using fleet management technology has helped customers see average reductions in fuel cost by 16%, accident costs by 22%, labor costs by 16%, insurance premiums by 13% and maintenance costs by 16%, according to our Fleet Technology Trends Report.

There are often additional efficiencies hiding in places like unauthorized vehicle use, inefficient routing, or underutilized assets. The only way to see the full picture is by conducting a comprehensive fleet management cost savings analysis.

Here’s how to do it.

Step 1: Set clear objectives and scope

The first step to tackling a fleet management cost savings analysis is to clearly define what you're trying to achieve and what will be included in the analysis:

• Are you targeting specific savings areas (fuel, maintenance, labor)?
• Are there any trends in fleet costs you want the analysis to address?
• Which vehicles or assets will be included?
• What is the timeframe for analysis (monthly, quarterly, annually)?

Note that fleet management software can simplify this step, offer greater accuracy and save considerable time by automatically gathering precise data from your vehicles, assisting in analyzing the data and clearly showing how small changes may impact your bottom line. 

Step 2: Identify and categorize fleet costs

For a precise fleet management cost savings analysis, thoroughly identify and categorize all fleet costs. Essentially, you’re calculating the total cost of ownership, which encompasses the complete cost of acquiring, operating, and maintaining a vehicle over its lifespan. To determine this, look for:

• Fixed costs, which include vehicle payments, insurance premiums, licensing and registration fees, office overhead, depreciation, and fleet software subscriptions.
• Variable costs, which fluctuate and typically include fuel, maintenance and repairs, tires, driver wages, downtime, accident expenses, legal fees and miscellaneous travel costs.

Be thorough when gathering this information–overlooking any cost category can distort your analysis, leading to inaccurate conclusions about savings potential.

Step 3: Collect and analyze relevant data

Effective fleet management cost savings analysis also requires collecting data outside of pure cost. Look at driver logs, Driver Vehicle Inspection Reports, maintenance records, fuel cards, telematics data, dashcam footage, and financial statements for more information about how your vehicles are used and where inefficiencies may lie. Key metrics include:

• Cost per mile: Total operational cost divided by miles driven, offering insights into efficiency per vehicle.
• Fuel efficiency: Average miles per gallon and fuel spend patterns.
• Maintenance costs: Frequency and costs of repairs and regular servicing.
• Vehicle downtime: How often and how long vehicles are unavailable for use due to maintenance or repairs.

Using data analysis tools within fleet management software can automate some of these metrics, offering more organized, actionable insights to identify savings opportunities and improve decision-making.

Learn more about how using fleet managers are using technology to improve the ROI of their fleet investments.

Step 4: Develop actionable cost-saving strategies

Once you have identified metrics and pulled data, it’s time to develop targeted cost-saving initiatives, leveraging proven strategies:

• Fuel savings: To reduce fuel costs, look to optimize routes, reduce idling, and cut down negative driver behaviors, such as speeding and harsh braking. This requires careful route planning and coaching drivers toward more positive behaviors. Fleet management software can help optimize routes ahead of time and in real time, and dashcams and real-time alerts can help curb problematic driving behaviors and excessive idling.
• Maintenance: Implement proactive, preventative maintenance programs, properly train mechanics, and use quality parts. Telematics offers real-time vehicle performance data, automatic reminders, and streamlined scheduling to reduce unexpected downtime and costly repairs, helping to extend the life of your vehicles and reduce how frequently you need to purchase replacements, lowering capital expenses over time.
• Downtime reduction: Use asset tracking to help improve vehicle utilization, minimize unnecessary downtime and manage fleet size efficiently.
• Insurance savings: Promote safe driving practices through telematics, driver coaching and dashcam usage. 
• Theft and unauthorized use prevention: GPS tracking and geofencing alerts can help detect unauthorized vehicle use, reduce fuel misuse, and minimize wear and tear from off-hour activity. These tools also increase the likelihood of recovering stolen assets, reducing replacement costs.
• Labor savings: Paying closer attention to vehicle usage enables more accurate timekeeping, helping to eliminate payroll discrepancies and reducing unnecessary overtime.
• Negotiate and optimize supplier contracts: Regularly evaluate suppliers and seek competitive pricing for fuel, parts, and other fleet-related services, using data to support negotiations.

Fleet management software integrates these strategies into one system, offering comprehensive solutions for maximum efficiency and cost savings.

See cost analysis in action: A plumbing company utilizing Verizon’s solutions reduced their accident rate by 87%, achieving accident, maintenance and insurance savings.

Step 5: Communicate findings and drive action

Get everyone on board with your savings strategies by effectively communicating what you found in your fleet management cost savings analysis and offering clear action steps to move forward. To make communicating your analysis more engaging, take these steps:

• Create visual, easy-to-digest reports that summarize key takeaways
• Show exactly how much could be saved—and where
• Outline specific next steps, timelines and accountability

Follow up regularly with stakeholders to track progress and adjust your approach as needed. Fleet managers who take this ongoing, iterative approach to cost savings are the ones who continue to deliver strong results year after year.

How telematics solutions support cost savings

A fleet management cost savings analysis is essential for maintaining operational efficiency and profitability. A lack of visibility into fleet operations can silently drain your budget. Fleet management software can help you conduct a fleet management costs savings analysis, identify savings strategies and help you stick to a cost reduction plan. Fleet management software simplifies this analysis, offering clear insights and actionable savings strategies. By providing constant monitoring and feedback, telematics can also help you stick to your plan and continuously improve it over time.

KMZ MOTOR solutions provide comprehensive tools and enable data-driven strategies, supporting fleets in proactively managing costs, enhancing efficiency, and achieving sustained financial health.

Ready to see the difference for yourself? Schedule a demo today.