3 Ways to Reduce Fuel Costs and Improve Fleet Fuel Efficiency

Did you know that, after depreciation, fuel is your company’s next-largest vehicle fleet expense? Considering its significance, it’s a good idea to have controls in place to keep costs manageable.

Rising fuel prices, combined with pressure to keep costs down, are causing increased stress and more work for fleet managers. The good news is, there are specific actions you can take to better control your fleet’s fuel costs.

In today’s blog, we’ll outline three key strategies to reduce fleet fuel costs for your business:

1.  Changing driver behavior
2. Improving fuel expense management, and
3. Choosing the right vehicles

Improve Cost Reduction by Changing Driver Behavior

Monitoring driving can lead to significant fuel cost savings for your business. For example, proper route planning, encouraging drivers to reduce idling, avoiding harsh stops and starts, and maintaining the speed limit will all result in less wasted fuel and an improved bottom line.

Another important action you can take to keep fuel costs down is to encourage your drivers to make smarter fuel purchasing decisions.

It’s not uncommon to see a 10, 20, or even 30-cent variance in fuel prices within the same zip code. With gas prices constantly creeping up, it’s even more important to find the lowest-priced location. A general rule of thumb is to encourage drivers to choose tier-2 suppliers rather than tier-1 suppliers, which will result in lower pump prices.

If your employees use a vendor-specific fuel card, they won’t be able to choose among vendors to find the lowest price. But a managed fuel card program gives access to a variety of different vendors, allowing employees to locate the lowest prices while spending less time driving around looking for a specific vendor.

Improve Fuel Expense Management with a Fuel Card Program

If you don’t have a fuel card program in place, you’re likely spending more than you should on fuel. Fuel card programs are great for avoiding added expenses in a variety of ways. Did you know that, on average, for businesses not enrolled in a fuel program:

• One study found that fleets can lose roughly 5 gallons of fuel per vehicle per month to fraudulent purchases.
• Some fleets report 5–10% of annual fuel consumption lost to theft or misallocation, with overall spend losses from theft and fraud approaching 20% in severe cases.
• Recent industry data shows fleets saving around 8–9% on fuel per month on average after implementing fuel card programs.

For companies without a fuel card program, fuel purchases are often reported on an expense report or arrive as a line item on a statement. Therefore, you may not be able to detect unauthorized transactions.

Unfortunately, most businesses don’t even realize they have a spending problem. The results only show up when they see a significant drop in fuel expenses after implementing a fuel card program. In fact, on average, businesses that move from no program to a managed fuel program realize savings of up to 15% on their overall fuel management costs.

How Does a Fuel Card Program Work?

A fleet fuel card is accepted at 98% of stations across the US, so drivers don’t have to waste time and fuel looking for a specific vendor. Fuel cards come with built-in controls that allow you to set spending limits, and you’ll receive real-time alerts if a suspicious purchase is made. Additionally, a fuel card will reduce the administrative time required to monitor and process fuel receipts.

Rather than spending time reconciling invoices from each employee, you’ll receive a single detailed, annotated invoice every month that you can quickly review. You’ll also have access to a secure online portal where you can monitor your fleet’s overall fuel spend with ease.

In summary, a fuel card program saves administrators significant time, simplifies gas purchases for drivers, improves fuel cost tracking, and enables stronger controls and cost savings amid rising gas prices.

Choose the right Vehicles and Manage Them Properly

One of the best vehicle fleet management strategies to keep fuel costs low is to choose the right vehicles for the jobs at hand.

When looking for a new vehicle, first consider the right “fit-for-purpose” model you need for the job, then look for the best fuel efficiency within that category. Don’t get stuck with the wrong vehicle that isn’t fit for the job you need it to do, simply because it has the best mileage.

Properly cycling into new vehicles is also an effective strategy to lower your overall costs. If you keep vehicles in your fleet for too long, you miss out on opportunities to run newer, more fuel-efficient models that are continually coming to market.

Additionally, regular vehicle maintenance will help improve your fuel efficiency. Things like keeping your engines tuned, tires properly inflated, and using the proper motor oil all contribute to better efficiency.

Final Thoughts

Improving driver behavior, implementing a fuel card program, and choosing the right fuel-efficient vehicles all lead to substantial savings in fuel and efficiency for your company. Whether you choose to implement just one of these strategies or all three, you’ll be well on your way to lowering your fuel costs and improving your bottom line.

Would you like a free, personalized cost-savings estimate for your fleet? Check out our fleet cost calculator tool.

Frequently Asked Questions