How to manage company vehicles and transport costs effectively
Company vehicles — whether owned cars, a commercial fleet, or leased vehicles — represent a significant cost and liability that is often poorly managed in Indian SMEs. Fuel costs, maintenance, driver management, and depreciation add up quickly, and the ROI of the vehicle fleet is rarely calculated.
Start with fleet utilisation analysis. What percentage of the time are your vehicles being used for business purposes? A company car that drives 2,000 km per month for business and 1,500 km for personal use of the employee is a poorly structured benefit. Track odometer readings and trip logs to understand actual utilisation.
Fuel management is the biggest controllable cost. GPS tracking with fuel log integration allows you to reconcile fuel consumption with distance travelled — which quickly identifies excessive fuel claims or inefficient routing. For fleets above 5 vehicles, a fuel card programme (from Reliance, HPCL, or private providers) provides centralised billing, eliminates cash fuel purchases, and generates transaction reports.
Maintenance cost control: each vehicle should have an AMC or a defined service schedule. Services missed to reduce short-term costs typically result in higher repair costs within 6–12 months. Maintain a vehicle log for each asset: service dates, mileage at service, repairs done, and costs.
Driver management: if you employ drivers, their behaviour directly affects fuel consumption, vehicle wear, and accident risk. GPS tracking, speed monitoring, and periodic driving assessments (available through fleet management service providers) give you the data to manage driver behaviour.
Leasing vs. owning: for non-core vehicles (executive cars, delivery vehicles that aren't part of your primary business), leasing often makes financial sense. It converts a capital cost to an operating cost, includes maintenance in the monthly charge, and eliminates residual value risk at lease end. Compare total cost of ownership vs. lease cost for your specific vehicles before deciding.