Whether your company has one vehicle or dozens on the road, smart management can save you money. Familiarity with tax laws, simple maintenance steps and high-tech solutions can reduce the costs of operating your fleet and keep it safer.
START WITH TAXES
One of the best ways to save money is to spend some time with a financial professional. Deductions can make a major difference in the cost of operating a fleet, particularly in the first year of ownership. Smith Schafer has the experience and understanding of the transportation industry to make a lasting positive difference in your future success. Our Transportation Group, comprised of numerous professionals, is committed to serving over 80 Minnesota transportation entities.
Example (under current tax law):
You can deduct certain amounts for depreciation of vehicles used for business purposes, including passenger cars and light trucks or vans. Consult with your Smith Schafer professional for the details.
You can deduct the business-use percentage of such operating costs as gasoline, oil, maintenance, insurance, registration fees and licenses.
If you lease, you can deduct the business-use percentage of your monthly payments. Deductions are slightly reduced for certain passenger cars and light trucks and vans. You can also write off the business-use percentage of operating costs for a leased vehicle.
Whether you buy or lease, keep good records of the business miles you drive for tax purposes.
FOLLOW UP WITH MAINTENANCE
Beyond tax savings, simple maintenance can keep your costs down and your safety record up. Here are a eight tips:
- Check the air pressure of your tires daily when they are cold and fill if necessary. Low air pressure causes stress and irregular wear that can result in loss of control.
- Inspect tires every 30 days for wear and evidence that the suspension isn’t aligned properly.
- Rotate tires regularly to help achieve more uniform wear. The guideline for tire rotation is approximately every 6,000 miles.
- Avoid premium gasoline unless necessary. If your vehicles do not specifically require an upgraded fuel, buy regular unleaded.
- Shop around when you hire out routine maintenance. Costs can vary as much as 50% depending on which shop you use. Consider doing in-house maintenance. Your business can be more productive if your vehicles continue to run during normal hours and are serviced by staff mechanics after hours.
- Keep your fleet in a garage or parked under a carport. It helps keep them in better condition and if garaged, may lower your insurance cost.
- Shop for insurance. Re-bid your insurance policy to make sure you’re getting the best deal.
- Encourage safety. Run a motor vehicle report on every driver in the company. Revoke driving privileges for those with multiple infractions. Consider rewarding those with good records.
Watch for Hidden Costs
What’s driving your business? It should be efficiency and profit, but too often it is competition, revolving training and cash flow. You should have an advisor on your side to take a tax efficient, customer-centric approach to managing the top and bottom line and everything in between. Transportation has been a key practice area of ours since 1971. Let’s start the conversation.