Updated 20th February 2019
Today, in our A to Z of fleet management blog series, we are going to cover something that might sound a little trivial, but actually refers to something that often crops up with fleets and companies that manage vehicles: we are talking about situations where excess is the keyword (hence why we decided to dedicate our latest post to it).
If you are thinking how excess specifically relates to fleet management, what mainly comes to mind for most fleet directors or managers, and those familiar with fleet vehicle leasing, is “excess mileage”. When starting a leasing contract for a particular vehicle, mileage limits are often one of the conditions to be negotiated with the leaser and defined in the leasing contract.
What often happens is that, despite the two parties establishing a certain limit, it is often difficult to stick to it as the use of the vehicle can change during the lease or hire period; in some cases partly because some companies might opt for a vehicle lease without having specific data on the mileage covered by vehicles or drivers on the routes that will be covered by the leased vehicle. This lack of data or the lack of planning for a possible situation where the mileage limit has been exceeded and a quick solution or replacement needs to be found often leads to the situation whereby excess mileage comes into play.
When leased vehicles exceed the mileage agreed, companies using them incur extra expenses that are not only based on the depreciation vehicles incur as their mileage increases, but according to the contract agreed these might have an added extra based, for example, on the additional maintenance or upon any services you might have agreed with the leasing company.
What should you do then in order to eliminate overcharges caused by excess mileage?
#1 – Track leased vehicles.
If your leasing company does not suggest this or if you have never tried this, you should definitely get your vehicles tracked so as to avoid being surprised by the excess mileage. The idea is that you also do not wait for the last minute to check mileage; it is definitely not ideal to find yourself in the situation of already having exceeded the limit agreed upon and not knowing what to do. Not exceeding mileage at the end of your contract is also not ideal: in these cases, refund for unused mileage is not possible. So if you want to avoid the situation where you only realise at the end you have some mileage to spare, vehicle tracking is your answer—and if you track your other vehicles, you can even make informed decisions on how to rotate your vehicles in order to make the most of the mileage allowed.
#2 – Eliminate trips that are not strictly necessary.
We are certainly not suggesting cutting out any mileage necessary to service customer demand, but rather the mileage incurred by the incorrect use of fleet vehicles or just simply eliminating trips to company depots or even fuel stations that end up becoming too great a diversion from the primary destination. If you are a good planner, this shouldn’t be an issue, and you won’t have any unexpected mileage excess.
#3 – Take the most efficient route to a certain destination.
Planning appropriate routes can actually make a significant difference to your mileage (notwithstanding all the associated economic and environmental benefits)—so do not hesitate to plan in advance, and take advantage of fleet tracking solutions offering route planning in order not to get surprised by excess mileage.
The old adage says that anything in excess is bad—except perhaps an excess of precaution and planning, so long as it doesn’t completely monopolise your time—if you’re struggling to get your head around all the logistics, give us a shout, we will be glad to help with route planning and tracking to make the most out of your fleet mileage.