What is the Total Cost of Fleet Ownership

Are you curious about the true cost of maintaining and operating your fleet of vehicles? Look no further, we have the answers. Whether you’re a small business with a few vehicles or a large corporation with an extensive fleet, understanding your costs is crucial for making informed decisions and optimizing your operations.

Our Fleet Cost Calculator is here to help you gain insight into the financial aspects of your fleet management. Click here to discover your fleet costs.

Below we have broken down how we calculate the total cost of fleet ownership, taking into consideration both soft and hard costs.

WHAT ARE SOFT AND HARD COSTS?

What are hard costs?

In the context of fleet management, “hard costs” refer to the direct and tangible expenses associated with owning, operating, and maintaining a fleet of vehicles. These costs are typically easy to quantify and are directly attributable to the vehicles themselves or the activities related to their operation. Hard costs in fleet management typically include: Maintenance& repair costs, fuel expenses, insurance premiums, employee salaries and benefits, financing costs, upfitting costs & licensing and registration fees

What are soft costs?

In the context of fleet management, “soft costs” refer to the indirect and often less tangible expenses associated with owning, operating, and maintaining a fleet of vehicles. These costs are not directly tied to specific vehicle-related expenditures and therefore can be hard to track and measure, but they can have a significant impact on the overall financial health and efficiency of a fleet operation. Soft costs in fleet management typically include administrative costs (booking and coordinating services), productivity/downtime of employees, vehicle downtime, opportunity costs, and technology integrations.

CALCULATOR BREAKDOWN

See the calculator for yourself here!

Fleet Operational Costs

Personnel Cost

This value is calculated by taking the cost of the time it takes your staff to monitor each vehicle using telematics, scheduling oil changes, dropping the vehicles off, and picking them up. This is calculated using the hard costs of the time it takes to monitor each vehicle, schedule the maintenance, and arrange for the work to be done.

Equation: $20/hr x Time Task Takes x Number of Vehicles

Example
$20 x 0.5 hours x 60

Vehicle Maintenance

This is the total cost of oil changes and oil filter replacements for a year. This example is based on our typical client under the managed fleet services. They have 15 vehicles in total. 10 are Ford Transits and 5 are Ford F-150s. They are varying years between 2019 and 2021. Scheduled vehicle downtime assumes the standard annual service intervals for your fleet vehicles (i.e. 3X/Yr for gas). Oil & filter change is estimated at $178/per and an average 2 per vehicle a year.

Equation: (Number of Vehicles x $178) x 3

Opportunity Cost

Vehicle Downtime & Driver Downtime

When accounting for the total cost of ownership, it’s important to look at the opportunity cost associated with the way you manage your fleet. Tasks that your staff would normally complete, like dropping and picking up a vehicle for service and waiting for the service to be completed, are all costs to your business, this is considered downtime, otherwise known as the time you aren’t able to earn revenue.

Onboarding ThinkFleet eliminates this downtime cost to your business. We are able to service vehicles on-site, and ensure your staff is not waiting for service.

We calculated this using the following equation:

Scheduled Vehicle Downtime
$100 x 5 hours x 60

Unanticipated Vehicle Driver Downtime
$40 x 8 hours x 10

Fleet Costs with ThinkFleet

When you work with us, we are able to leverage telematics data along with interval maintenance schedules to eliminate your vehicle and driver downtime costs. We schedule and complete your maintenance for you, ensuring all work is done during nonworking hours. This means you never have to sacrifice revenue-generating hours waiting to get your vehicles serviced.

By taking a proactive approach to your fleet maintenance we can help decrease the total repair and maintenance cost your business incurs. With this approach, we are able to keep vehicles on the road for longer while decreasing costs. We are also able to help optimize your fleet by making recommendations on the best time to replace vehicles in your fleet. This is based on our market analysis data along with the health of your vehicle.

CALCULATE THE TOTAL COST OF YOUR FLEET HERE