What Is Fleet Lifecycle Management? Everything You Need to Know for 2024

Fleet lifecycle management is an essential practice that fleet managers use to extract the maximum value from a fleet of commercial vehicles.

As a vehicle ages, operating costs increase; repairs become more frequent, fuel efficiency diminishes and their resale value declines too. This means business owners need to find the perfect point at which to sell their old vehicles and purchase new ones, rather than simply run their existing fleet into the ground.

To get the balance right, careful predictive planning and monitoring are required via a comprehensive fleet management system. Below, we’ll detail all the benefits of fleet lifecycle management, the various factors that determine when a lifecycle is over, and what expert tools you can use to manage your fleet across its entire lifecycle.

What is Fleet Lifecycle Management?

Fleet lifecycle management refers to the strategic acquisition, monitoring, and disposal of commercial vehicles. The goal is to extract the highest value from your fleet vehicles by analyzing information such as insurance costs, vehicle age, and usage so that you can extend the lifespan of your fleet and replace each fleet vehicle at precisely the right moment. Ultimately, this ensures that operating your current fleet doesn’t lose your business money.

Key Aspects of the Fleet Lifecycle

• Acquisition: Upfront cost of vehicles, licensing, and insurance costs
• Monitoring: Ongoing maintenance/repairs, fuel consumption and cost tracking
• Replacement: Obsolescence costs, downtime costs, and market value

What Impacts the Lifecycle of a Fleet?

The lifecycle of a fleet will inevitably vary depending on the unique makeup of your business. Here are a few factors that will impact your fleet’s lifecycle:

Industry – Different industries put varying demands on their fleets. For example, construction fleets generally require more maintenance, repairs, and fuel than delivery fleets due to comparatively more intensive work, affecting their fleet lifecycle.

Vehicle type – An interrelated factor is the type of fleet vehicle. For instance, while the average car lasts around 200,000 miles, a semi-trailer truck – built to endure longer distances and heavier loads – often runs for more than 750,000 miles. Similarly, vehicles with specialized equipment – such as refuse or grit lorries – will be more directly impacted by the work they are used for compared to vehicles solely used for travel.

Distance traveled – A further related factor is the total mileage of your commercial vehicles. How far they’ve already driven will reduce the remaining lifespan of your fleet, as well as the resale value of your vehicles when it’s time to find replacements.

Fleet Size – Simply put, the more vehicles in your fleet, the more complicated the analysis of a fleet lifecycle becomes due to the sheer number of simultaneous metrics that need recording, from fuel consumption to repair costs.

Technological advancements and laws – As vehicular technologies improve, relative costs within the industry can change and directly impact decision-making around the lifecycle of your current fleet. A major example of this is the projected increase of electric vehicles on the road in the US to almost double 2024 levels by 2028, which may bring costs down and make it more attractive to fleet owners.

Local laws – Changes to the law, through prohibitive action like bans or progressive legislation such as subsidies, may make the adoption of new fleet technology more or less feasible, too. For instance, since 2023 all-electric, plug-in hybrid, and fuel-cell electric vehicles purchased new are eligible for a federal income tax credit of up to $7,500.

Benefits of Fleet Lifecycle Management

By keeping abreast of your commercial fleet’s lifecycle through effective fleet lifecycle management processes, there are many possible benefits to be realized, including:

• Reduced maintenance and repair costs: As a vehicle increases in age and goes through more use, its condition tends to deteriorate. This may lead to costly maintenance and repairs being needed for your fleet vehicles on an increasingly regular basis.
• Driver safety: Newer vehicles often have improved safety features, such as collision warning systems, which can protect your drivers from accidents and breakdowns. This may also keep driver satisfaction at higher levels, too.
• Reduced downtime: By avoiding your vehicles being out of action with repairs or accidents, you’ll be able to have your fleet in use for longer periods and time overall to keep your business from stopping in its tracks.
• Increased fuel efficiency: In general, vehicles tend to have reduced fuel efficiency with greater mileage on the clock. This results in diminishing returns from fuel purchases over time as your commercial vehicle ages. Meanwhile, the fuel economy of most new vehicles is ever-improving – particularly electric and hybrid vehicles – so it’s financially beneficial to manage your fleet effectively.
• Retaining a good public image: Should any customers see your vehicles on the road, you’ll want to make a solid first impression. By not tracking your fleet lifecycle, there may be vehicles with your company branding that are old and/or poorly maintained. Customers may react negatively to this image and assume your company doesn’t take care of its assets and potentially, its customers too.
• Sufficient resale value: At some point, you’ll need to pull the plug on a vehicle at your business. However, if you’ve run that vehicle until it’s undrivable, you’ll not be able to get much money for your asset. Even if it’s in working order, vehicles with a high mileage count can put off potential buyers.

Fleet Lifecycle costs

Fleet lifecycle costs encompass two categories: operating costs and ownership or carrying costs.

Operating costs are the total price of using and maintaining a fleet of vehicles and will include fixed and variable expenses that generally increase over time, such as:

• Maintenance and repairs
• Fuel
• Tracking costs
  
• Breakdown or downtime costs

Ownership costs are simply the cost of owning the vehicles. They generally decrease over time and include:

• Purchase price
• Insurance and licensing fees
• Interest and taxes
• Depreciation/Resale value

Once all the costs of running your fleet are calculated, they need to be valued against the cost of owning the fleet vehicles. Since
operating costs generally increase over time and ownership costs decrease over time, business owners need to assess exactly when the costs of running their fleet surpass ownership costs.

This is the optimal disposal point for your fleet vehicles since operating costs for each vehicle will only get more costly after that point.

How can I reduce my fleet vehicle costs?

• Choose the most fuel-efficient vehicles that best suit your business strategy to reduce the impact of fuel operating costs.
• You can also reduce fuel prices through fleet fuel card providers, who frequently offer discounts on gas, diesel, and even electric charging purchases via their cards. These can be prepaid fuel cards loaded with a specific amount or simply debit/credit card style fuel cards that can be designed to only be used for fuel (and other work-related purchases).
• Regular maintenance of mechanical problems or even inflating tires correctly will ensure fuel costs are minimized, too.
• Training drivers on fuel-efficient driving practices, and monitoring ongoing driver performance, can also help you assess where gains in efficiency can be made and therefore reduce costs.
• Bundling insurance policies for multiple fleet vehicles can bring in discounted prices for your fleet.
• Keeping up to date on licensing fees and local regulations will ensure you meet compliance standards and avoid any nasty surprise expenses.
• Fleet lifecycle management systems are an excellent way of tying all this important information about your fleet vehicles together. Read on below to find out how you can manage your fleet’s lifecycle with one of these tools.

How to Manage the Fleet Lifecycle

Logging and calculating all operating and ownership costs of your commercial fleet can be a troublesome activity. To facilitate and speed up the process, many fleet management systems have built-in lifecycle tools to do just that.

They are a key way of making sure data about your commercial vehicles – from distance traveled and fuel consumption to maintenance costs and more – are all tracked and measured so you aren’t spending more on running costs than the value of your fleet.

These tools often help you track and analyze details about many of the above cash-saving methods in one place. For instance, you can often optimize routes to avoid unnecessary fuel consumption, keep tabs on maintenance schedules, and monitor driver behavior to help with future decision-making regarding your fleet.

Fleet Lifecycle Management Systems

Fleet lifecycle management systems are typically found inside of fleet-related software – and there are lots to choose from. Here are the core details on two of our favorite options.

1. Fleetio: Best for Fleet Lifecycle Management tools

2. Samsara: Best for all-in-one software for managing vehicles

Other Fleet Management Software

There are plenty of options when it comes to fleet management software, each offering different suitabilities depending that encompass varying tools for fleet lifecycle management. Below are some of our top picks.

Managing a fleet’s lifecycle can offer major benefits to owners of commercial vehicles. Besides reducing the maintenance and repairs those vehicles need – and decreasing your fleet’s downtime in the process – you may even see fuel efficiency increase, driver safety improve, and overall costs diminish after implementing your actions.

To get to grips with how fleet assets perform, fleet lifecycle management systems are an excellent tool for business owners. By providing real-time data and analytical tools, business owners can be better informed on where any inefficiencies in their fleets are located and how costs can be reduced across their lifecycles going forward. 

As a result, decision-making – whether it’s big choices on retiring your fleet or day-to-day logistics around single vehicle maintenance – can become clearer and enacted more efficiently. In all, fleet lifecycle management is essential to a modern fleet-centric business.