As government budgets get tighter because of stagnant or decreasing tax revenue, managing public fleets becomes increasingly difficult. Government fleets typically face big challenges surrounding aging vehicles and budget scrutiny. As budgets decrease, it is more important than ever to efficiently manage aging government vehicles in order to keep assets in action longer.
In this post:
- Replace vehicles incrementally
- Sell underutilized vehicles
- Refurbish your vehicles
- Switch to closed-end leases
In 2015, 19% of fleet replacement budgets decreased and 38% did not change at all from the previous year. How can government fleets properly maintain their aging assets amidst low funding?
###Proactively maintain government vehicles
First, government fleets should proactively maintain their vehicles. As vehicles age, more maintenance issues arise, and this translates to increased vehicle downtime and a greater strain on government funding. Government vehicle downtime is a monetary and safety issue, especially if a police vehicle or fire truck cannot respond to an emergency.
The table below shows proactive maintenance costs for common vehicle issues. Most of these issues cost $100 or less to repair. This is significantly less expensive than vehicle downtime, which can cost close to $800 per vehicle per day.
Investing in your vehicles before experiencing issues can extend vehicle lifetimes, save money and improve safety.
###Replace government vehicles without breaking the bank
####Replace vehicles incrementally
Fleet vehicle replacement is a significant capital investment and government fleets simply do not have the means to replace multiple assets at once. Given budget limitations, vehicles should be prioritized and replaced overtime.
The criteria used to prioritize vehicles ready for replacement should include:
- Vehicle age
- Number of miles
- Percentage of availability and utilization
- Frequency of breakdown
- Average cost of repair
- Importance to the fleet
- Vehicle status
####Sell underutilized vehicles
Constantly keep tabs on your inventory to know which assets are sufficiently utilized and identify which are gathering dust. If you discover underutilized assets, sell them. By selling the asset, you will reduce maintenance costs and can invest the capital into new assets or other areas needed. Imagine purchasing new fleet vehicles with readily available dollars rather than digging through the budget trying to find available government funds.
“Keep tabs on your inventory to identify and sell underutilized assets. This will reduce maintenance costs and provide capital to invest in new assets or other areas needed.” Click to Tweet
####Refurbish your vehicles
Fleet operations dollars go a long way when purchasing a refurbished vehicle rather than a new vehicle. Refurbished vehicles can cost less than half the price of a new vehicle and can double the vehicle lifetime.
Example: In 2012, the City of Phoenix refurbished ten garbage trucks and saved $1 million!
“Refurbished vehicles can cost less than half the price of a new vehicle and can double the vehicle lifetime.” Click to Tweet
####Switch to closed-end leases
Leasing enables you to avoid funding the high upfront capital necessary for purchasing new vehicles. Closed-end leasing has no set monthly fees, which is helpful when planning an annual governmental budget. Also, the leases pose no residual risk to the lessee at the predetermined term end.
With a decreasing budget and aging vehicles, it is important for government fleets to be proactive and make smart monetary decisions based on data. Remain proactive in your vehicle maintenance and be sure to consider your options when the time comes to replace fleet vehicles.
To learn how Fleetio helps government fleets automate the fleet management process, click here!