When it comes to vehicle fleet management, every euro counts! In many businesses, total cost of ownership (TCO) is often the second largest expense after salaries. Among the various components of TCO, accidents and vehicle damage have a negative impact. In addition to repair costs, there are many hidden costs that are often underestimated. In this article, we will analyze the different impacts of accidents and car damage, as well as the various areas for optimization.
The hidden costs of car accidents and damage:
Unfortunately, this is the case: company vehicles suffer more or less serious damage during their use. Whether they are accidents or simple scratches, these events can ultimately have a significant impact on the total cost of the fleet.
Behind repair and restoration costs, there are often other types of costs that are often overlooked and add up.
First, let's consider the scenario where the fleet manager is aware of the accidents and damages... that is, they were reported by the driver. With full knowledge of the facts, the fleet manager may decide to take action to remedy the situation. They can file a claim with the insurance company, arrange for repairs, or provide a replacement vehicle. Depending on the measures taken, various costs may be incurred.
Downtime:
Above all, a vehicle out of service for repair represents a potential loss of revenue. A home repair company would therefore not be in a position to fulfill its mission and therefore to bill its customers. Some rental or insurance contracts of course provide for the provision of replacement vehicles for this type of event. This service generally increases the rental price.
Another solution is to rent a replacement vehicle temporarily. But it also comes at a cost.
Increase in insurance premiums:
Vehicle accidents generally lead to increased insurance premiums. These price increases do not only concern damaged vehicles but are generally applied to the entire fleet for the coming months and years.
Productivity loss:
Accidents often cause delivery delays. But also missed appointments and other issues that can compromise the productivity of the company as a whole.
Vehicle depreciation:
Even after repair, a vehicle damaged by an accident can depreciate more quickly than other vehicles in the fleet, reducing its resale value.
Now let's move on to another scenario, which is unfortunately quite common: an accident or minor damage unknown to the fleet manager. Let us illustrate this with a trivial example that is however so common and with such serious consequences. The driver exits a customer's parking lot and accidentally bumps into the gate slightly. He exited his vehicle and noticed a slight dent on the right front fender and scratches on the paint. He then considers the damage to be minor and not serious (or fears being reprimanded by his management). After all, it doesn't affect the vehicle's performance in any way, and it's not his personal vehicle! He decides to ignore the incident (which will certainly be followed by other incidents of the same nature). As the saying goes, “neither seen nor known”! Yes... until the day the vehicle reaches the end of its contract and must be returned to the rental company.
One fine day, the fleet manager informs the driver that the vehicle must be returned within 15 days. Ouch! It is too late for the driver to reverse course and inform the manager of the damage caused in the last 36 or 48 months. It is also too late to say “mea culpa” and hope that the vehicle will be repaired on time.
So what happens?
The inspection carried out by the lessor highlights all the damage caused to the vehicle and generates, in accordance with the initial rental contract, an unexpected bill for the fleet manager. If the repair cost is less than €1000, don't worry, you're doing well.
But as you will have understood, the bill for return costs often exceeds 2,000 euros, or even 3,000 euros, or even much more. The manager is then faced with a done deal and can only recognize a heavy and unexpected expense.
Optimization areas
The best way to avoid this type of situation is, above all, prevention. It should also be noted that risk prevention (including road risk) is a legal requirement for business managers.
Identification of risky behaviors:
Embedded telematics makes it possible to constantly analyze the road behavior of each driver. In the case of the Optimum Automotive fleet management platform, various criteria are examined: cornering, braking and acceleration. The processing of these driving events by algorithms makes it possible to establish a score, called an “eco-index score”, for each driver. Good drivers can thus be recognized and the less good drivers can be identified and subjected to specific measures.
Training and stimulation
Unfortunately, it is impossible to change road behavior overnight. For some drivers, a training process will have to be initiated: online courses, circuit courses with a professional trainer. Various formulas can be envisaged. Beyond training, the results should be observed (improvement of the eco-index score) and stimulated in the medium and long term. The fleet management solution thus makes it possible to create various challenges to stimulate and maintain the results obtained.
Vehicle maintenance
The conclusion is clear: a well-maintained vehicle is safer than one that is not maintained. Regular vehicle maintenance can help detect and repair problems before they become major incidents. To achieve this, the Optimum Automotive fleet management solution automatically retrieves the odometer reading. It is also linked to the maintenance schedules of car manufacturers. This gives the fleet manager total visibility and alerts on the deadlines and content of the maintenance recommended by the manufacturer.
Driver involvement:
As we saw in the previous example, a fleet manager cannot anticipate what he does not know. It is therefore advisable to put the driver at the heart of the process in order to optimize the impact of accidents and damage caused to motor vehicles. To this end, Optimum Automotive has designed, in partnership with R Solution Expertises, a “module for managing accidents and automobile damage”. The module is integrated into the Mobile Optimum Connect application (made available to drivers) to allow immediate reporting (date, time, location, type of event, photos of the incident, etc.) of any accident or damage. The information is then automatically transmitted to the fleet manager, who can then launch the appropriate action.
Through this service, the driver is also regularly invited to carry out a complete inventory of his vehicle, with supporting photos. Scratches, bumps... the manager thus regularly benefits from perfect visibility on the general condition of the vehicle and can make the necessary decisions to calmly anticipate the return of the vehicle.
To summarize:
The worst surprises are usually those that are discovered by chance or too late.
Thanks to advances in vehicle fleet management tools, it is now possible to plan in advance vehicle maintenance, training for at-risk drivers, possible repairs before returning, etc.
This allows the fleet manager to significantly and sustainably reduce the total cost of the vehicle fleet.
