Fleet Phoenix: Rise from the Ashes of High Costs!

Can I ask you this question…?

What do you think the average age of large commercial trucks is??

According to the Bureau of Transportation Statistics (BTS), it is approximately 17 years.

Which means that most fleets are running on outdated, inefficient, and unsafe vehicles that are costing them a fortune in maintenance, repair, fuel, and downtime costs. Not to mention the environmental impact of these vehicles, which emit more greenhouse gases than newer models. I mean, it’s little wonder why managing a fleet has become enormously expensive.

What about non-commercial vehicles like passenger vehicles and light trucks??

Again, according to the Bureau of Transportation Statistics (BTS), it is approximately 13 years.

If you are a fleet manager or a business owner who relies on vehicles for your operations, you need to consider replacing your fleet with newer, more efficient, and safer vehicles as soon as possible.?

We’ve had the opportunity to speak with many fleet managers who have vociferously spoken about the need to change the old fleet.

Luckily, in this article, we will show you how to do that without breaking the bank. We will explain why fleet replacement and lifecycle management are strategic investments that will benefit your bottom line, operational efficiency, driver satisfaction, and environmental performance.

We will also share with you a data-driven analysis of the optimal time to replace each vehicle in your fleet, based on the cost per kilometer, age, mileage, and condition factors.

And we will give you some tips on how to implement a fleet replacement plan in phases over a period of time, taking into account market conditions, resale values, financing options, leasing terms, and tax benefits.?

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The Problem with Your Current Fleet

One of the biggest challenges that fleet managers and business executives face is keeping their vehicles in good shape and running smoothly.

It is possible that with an aggressive fleet maintenance program that includes regular maintenance, tire rotations, and driver training, you could increase the lifespan of your vehicles.

But when the fleet maintenance program lacks luster, your business is probably set up for enormously high maintenance fees.

And without proper maintenance, it becomes harder and harder to keep costs down as the vehicles get older and accumulate more kilometers.?

Older vehicles tend to have more breakdowns, repairs, and maintenance issues, which increase downtime and operational costs.?

Do you know how much money you are wasting on your old fleet vehicles??

You might be shocked to find out.

A study by Automotive Fleet revealed that repair costs skyrocketed from $14.80 per vehicle in the first year to $68.62 per vehicle after three years. That means if you have 100 vehicles that are over three years old, you are throwing away $6,800 every month on repairs alone!

But that's not all.?

Older vehicles also burn more fuel than they need to because of their low fuel efficiency and high emissions. A report by Merchants Fleet showed that newer vehicles have better kilometers per litre, which can save you a lot of money on fuel in the long run. Not to mention, newer vehicles offer alternative fuel options, such as electric or hybrid, that can cut down on fuel costs and environmental impacts even more.

And there's more.

Older vehicles also put your company at higher risk of accidents and lawsuits because of their lack of advanced safety features and technologies. A survey by SmarterFleet found that newer vehicles have more advanced safety technologies, such as forward collision warning and automatic emergency braking, that can protect your drivers and reduce risk. These technologies can also lower your insurance premiums and claim costs.?

And last but not least.

Older vehicles also hurt driver satisfaction and retention because of their discomfort and inconvenience. SmarterFleet also found that 85% of employees at one Minnesota snowplow fleet preferred newer vehicles over older ones. Of course, drivers prefer newer vehicles because they’re more comfortable. And driver satisfaction is crucial for your business, as it can boost productivity, performance, loyalty, and customer service.

So what are you waiting for??

If your plan is to save money, reduce risk, and increase satisfaction, you’ll need to consider upgrading your fleet vehicles today.

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The Solution: Fleet Replacement and Lifecycle Management

What if I told you that you can save thousands of dollars every month, boost your productivity and performance, and make your drivers happier and safer, all by doing one simple thing??

I know it might sound too good to be true, right??

But it's not.

It's actually very simple.

You just need to replace your old fleet vehicles with newer, more efficient, and safer ones.?

That's it.

That's the secret to lowering your total cost of ownership, improving your operational performance, enhancing your driver satisfaction, and supporting your sustainability goals.?

But don't take my word for it.

Let me show you the facts.

Old fleet vehicles are costing you a fortune in maintenance, repair, fuel, and downtime costs. Not to mention, they are depreciating in value every day. And they are putting your drivers at risk of accidents and injuries, which can result in lawsuits and claims. And they are making your drivers unhappy and frustrated, which can affect their productivity and loyalty.?

New fleet vehicles, on the other hand, can save you money by reducing all these costs. Plus, they have better features, performance, and condition. And they have advanced safety features and technologies that can protect your drivers and reduce risk. And they have more comfort and convenience, which can increase your driver satisfaction and retention.

But how do you know when to replace your old vehicles with new ones?

That's where fleet lifecycle management comes in handy.?

Fleet lifecycle management is the smart way to optimize the lifespan of each vehicle in your fleet. It uses data-driven analysis of the cost per kilometer, age, mileage, and condition factors, as well as the availability and suitability of alternative fuel options and incentives. It helps you determine the best time to replace each vehicle in your fleet based on the point that results in the lowest overall cost over the vehicle’s lifecycle.?

By using fleet lifecycle management, you can create a strategic plan that will help you optimize your fleet performance and efficiency.

So, what are you going to do now that you know all this?

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The Cost-Benefit Analysis

Imagine if you could save $15 million in 5 years just by changing one thing in your business.

Sounds impossible, right?

But it's not.

It's actually very easy.?

You just need to replace your old fleet vehicles with newer, more efficient, and safer ones.?

And that's it.

That's the secret to lowering your total cost of ownership, improving your operational performance, enhancing your driver satisfaction, and supporting your sustainability goals.?

But you don't have to take my word for it.

Let me show you the numbers.

We have prepared a cost-benefit analysis of the proposed plan for a hypothetical fleet of 100 vehicles.?

And here's how it works:

- The current fleet consists of 50 sedans, 30 light-duty trucks, and 20 heavy-duty trucks, with an average age of 11 years and an average mileage of 240,000 kilometers.

- The proposed fleet will consist of 50 sedans, 30 light-duty trucks, and 20 heavy-duty trucks, with an average age of 3 years and an average mileage of 84,000 kilometers.

- The proposed fleet will also include 10 electric vehicles (EVs), 10 hybrid vehicles (HEVs), and 10 alternative fuel vehicles (AFVs), depending on the availability and suitability of these options for each vehicle application.

- The proposed plan will require an initial investment of $10 million, which will cover the purchase or lease costs of the new vehicles as well as the installation costs of any necessary infrastructure or equipment for alternative fuel vehicles.

- The plan will generate a net savings of $15 million over 5 years, which will result from the reduction in maintenance, repair, fuel, and downtime costs; the increase in resale values; the decrease in safety risks and liability costs; and the increase in driver satisfaction and retention.

- The plan will have a payback period of 18 months, which means that the initial investment will be recovered within 18 months from the start of implementation.

- The plan will also have a positive impact on the company’s environmental performance, as it will reduce greenhouse gas emissions by 1,000 tons, fuel consumption by 378,541 liters, and waste generation by 10,000 pounds per year.

As you can see, the benefits are huge.?

But you will need to act fast.

If you want to save money, reduce risk, and increase satisfaction, you need to replace your old fleet vehicles ASAP.

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Final Thoughts

As you can see, fleet replacement and lifecycle management are strategic investments that will benefit your bottom line, operational efficiency, driver satisfaction, and environmental performance.?

And the plan is based on a data-driven analysis of the optimal time to replace each vehicle in your fleet, taking into account the cost, performance, and condition factors, as well as the availability and suitability of alternative fuel options and incentives.

The plan will require an initial investment of $10 million but will generate a net savings of $15 million over 5 years with a payback period of 18 months.?

The plan will also support your sustainability goals, as it will reduce greenhouse gas emissions, fuel consumption, and waste generation per year.

?The plan is ready to be implemented in phases over a period of 5 years, starting with replacing the most inefficient and costly vehicles first. The plan will also consider the market conditions, resale values, financing options, leasing terms, and tax benefits for each vehicle type.

Don’t wait any longer to replace your fleet. Start today by following the steps and tips we shared with you in this article. And if you need any help or guidance, feel free to contact us at [email protected]. We are experts in fleet replacement and lifecycle management, and we are ready to help you achieve your goals.

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Now, if you get any value from this, I need you to help us spread this message. Share it with friends on Facebook, Twitter, and LinkedIn. You could also forward it to someone you love or hate via email (hopefully you’re not the type that hates people).

That’s all for now.

Catch you next Tuesday.

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P.S. Here’s how we can work together:

If you’re a business leader (you run a business or are a business executive) and you’re seeking end-to-end fleet management solutions, please fill out this form.