Whole life costs, which include a vehicle’s depreciation, SMR (service, maintenance and repair), fuel and road fund tax, are commonplace in establishing company car policies and budget setting.
Yet, these pre-event costs can only include current and forecasted data, which leaves a few things out. A vehicle’s true cost will depend on how it’s driven. The number of accident repairs, actual fuel usage, the real maintenance cost caused by poor or aggressive driving and its use of tyres and brakes. I’m sure many contract hire and fleet management companies can report on most of this when the vehicle is returned, but to what extent do companies work out a real posthumous pence per mile of a de-fleeted vehicle?
There will be a number of fleet managers who come forward to say they have this data to hand, and I’d be interested to hear from any that do.
Yet, for those that don’t, imagine how powerful it would be to pull together the total contract hire rentals paid (including any extensions) or the real depreciation, fuel, maintenance, fast fit, accident repair, hire car costs (as a result of a vehicle off road), and recharges/end of life repair costs. Divide this by the number of actual miles to give a ‘real’ whole life cost which is as much about the driver as it is the vehicle.
Sounds good doesn’t it. But many will be also thinking it seems a lot of work.
A simpler alternative would be to risk assess your drivers using an online profiling tool. In doing so, you could pinpoint those most likely to have an accident and factor in another forecasted cost – namely the added expense of a high risk driver being in one of your vehicles.
Take, for example, a budgeted pence per mile of 45p over 60,000 miles. That’s a whole life cost of £27,000. Add in a forecast of, lets say, £5,000 of accident costs and suddenly the pence per mile has shot up to 53 pence.
It’s at that point, that driver training suddenly looks like a very worthwhile investment. The cost of using online courses to minimise the chance of the driver incurring that extra 8 pence per mile is approximately £50 per year. Or, to put it in perspective, it’s a ¼ of a pence per mile, taking the original 45 pence to 45.25 pence.