By RAM Tracking on 13 Apr 2018
Based on a recent study conducted by the UK Department for Transport, one in three small businesses experiences costs upwards of £500 per day. Beyond the initial cost of replacement parts or vehicle maintenance, most often thought of as a cost-component of breakdowns by fleet managers or business owners, the often-immeasurable opportunity cost adds up drastically when a breakdown occurs. Think back for a moment, to that economics course that you snoozed off in back in university, to where the underlying foundation of opportunity cost took root. In case it did not quite sink in during university, the opportunity cost for fleet managers is realised when a benefit, profit, or value of something must be given up in order to achieve something else. For example, a breakdown presents the unfortunate reality for a business to quickly give up value in the delivery of goods or services, in the event of a repaired vehicle instead. If a fleet experiences multiple breakdowns throughout the year, the costs can quickly add up and swiftly impact the bottom line, both on a determinable and a non-determinable basis.
The study highlighted previously helped to note that the average fleet size for businesses in the UK was somewhere between six and seven vehicles. If each vehicle on the fleet were to break down, even just one day per year, costs for being off the road would top £3,500. The cost for being off the road is just the beginning for business owners. What happens when the vehicle hits the repair shop and the cost of maintenance, replacement parts, and additional service quickly add up, further impacting the bottom line?
Safety enhancements and technology developed in modern vehicles have countless benefits to drivers and business owners, alike. However, when a vehicle has a breakdown, the same benefits that helped to keep the driver safer, can also help to raise the maintenance repair tab. With safety technology in most modern vehicles, the cost for vehicle repair over the past three years has jumped considerably, reaching an average of £1,678 per repair. Considering the average fleet size in the UK is approximately seven vehicles, the baseline cost of breakdowns combining off-the-road costs as well as repair costs could easily rise above £15,200 per year.
Fortunately, for business owners and fleet managers throughout the UK, there are multiple options to help decrease costs in relation to vehicle breakdowns. By developing swift contingency plans, as well as thorough preventative maintenance and checklist procedures, the cost impact to fleets in the UK can be drastically reduced. This would keep the opportunity costs and actual costs to a minimum while meeting the diverse needs of consumers throughout the region.