Fleet Expenses Fleet Management

How Fleet Lifecycle Management Lowers Total Cost of Ownership

Jeremy Kritzer of Ewald Fleet Jeremy Kritzer

While some businesses may be unfamiliar with fleet lifecycle management, the practice is essential to lowering your total cost of ownership. Not only that, it ensures your vehicles continue to operate well and generate revenue for the business. A data-driven life cycle management strategy results in decreased downtime, fewer repairs, and lower fuel costs while maximizing vehicle resale value.

In this blog, you’ll learn the cost-saving benefits of a managed fleet life cycle strategy for businesses of all sizes.


What is Fleet Life Cycle Management?

Fleet life cycle management refers to strategically acquiring and disposing of vehicles in order to get the most value out of them.

The three key areas involved in life cycle management are:

  1.  Vehicle Market Value
  2. Maintenance Costs
  3. Fuel Costs

By properly tracking data on these expenses, you'll be able to clearly determine how much you're spending on each vehicle per month, and when is the optimal time to cycle a vehicle out of your fleet.

Optimal vehicle lifecycle

Why Is Fleet Life Cycle Management Important?

Fleet life cycle management is the first step to minimizing your total cost of ownership. As a vehicle ages its market value decreases, while its operating costs rise. The key is to replace vehicles when their net expenditure is at the lowest point.

Proper fleet life cycle management allows you to operate a newer fleet for less money. In addition to lower fuel and maintenance costs, newer vehicles typically have more safety features like collision warnings and automatic braking that help keep drivers safe and reduce accidents.

Many companies choose to purchase fleet vehicles rather than lease. Once the vehicle is paid for, they drive it until it is out of commission. But as a vehicle’s mileage increases, its fuel and maintenance costs skyrocket and it is forced into more downtime for repairs, interrupting business operations and decreasing productivity.

If you don’t have reporting in place, these rising expenses and downtime can go unnoticed. You may end up overpaying on operation costs and miss out on good returns when selling your vehicles.

Fleet management done right at Ewald

How We Can Help

Over the years at Ewald, we’ve gathered robust data on the life cycle strategies that work best for different industries. We provide different recommendations for different types of vehicles and then adjust a company’s lifecycle strategy based on both industry data and our experiences with other customers that are within that same vertical.

We look at the specific make and model of a vehicle and what it is being used for. If a particular vehicle is being driven more often or on rougher terrain, we will cycle it out sooner than a vehicle that isn’t being driven as hard. Different makes and models age differently, and our programs include preventative maintenance to keep all vehicles operating strong.

We also monitor market trends to determine depreciation milestones. For example, certain pickup trucks should be sold before they hit 100,000 miles, while others can surpass that and still hold their value.

Our focus is on finding the replacement point where a vehicle’s market value, maintenance costs, and fuel costs intersect each other, before market value decreases and operating costs rise.

Final Thoughts

Life cycle management is a hallmark of fleet optimization. It will help you save on fuel and maintenance costs, maximize resale value, and minimize downtime. Understanding the point where your fleet's fuel, maintenance, and depreciation costs are still low will allow you to strategically cycle vehicles out of your fleet and maintain a healthier bottom line for your business.

Get to know the Author

Jeremy’s automotive experience sets a great foundation for providing his customers with recommendations and decisions that fit their business needs. His role is to build long-standing relationships with his customers and consult them on successful fleet management programs.

In his free time, Jeremy enjoys spending time with his family, watching sporting events, and doing outdoor activities.

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Jeremy Kritzer of Ewald Fleet
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