For small businesses that rely on company vehicles, effective fleet management is crucial for minimizing risk, reducing downtime, and improving operational efficiency. That’s why more companies are replacing manual tracking and legacy systems with cloud-based fleet management solutions.
Fleet management tools offer time- and money-saving features like route optimization, real-time driver tracking, and compliance support. Below, we’ll share practical strategies and tools to help keep your fleet efficient, compliant, and cost-effective.
Implement policies and procedures for vehicle usage
When managing a fleet, you need clear and concise written policies that outline the expectations of both the employer and employee. For example, clarify prerequisites, such as having a valid driver’s license and a clean driving record, to drive a company vehicle. Additionally, record company obligations such as promising an insured vehicle to employees who are eligible to drive one and regularly maintaining vehicles.
[Read more: How to Write a Company Vehicle Use Policy]
Create a vehicle maintenance schedule
Ensure safety and cut down on risk by keeping a maintenance schedule. This way, you can prevent issues before they even happen. Most vehicles need to be checked every six months for routine maintenance, such as tire inspection and rotation, brake checks, and oil changes.
Provide training and education for drivers
Employees who use a company car should be educated on the vehicle and the company’s policies. You don’t want employees unaware of certain rules or unsure of how to respond in a situation, such as a fender bender.
A well-trained driver will know company safety guidelines by heart, reducing risk and cutting down on preventable mishaps.
[Read more: Do Your Employees Use Their Own Vehicles for Work? Here's What You Need to Know]
Sometimes the cost of keeping a vehicle in operation consumes more money than it's worth. Keep an eye on the cost of ownership to make sure you aren’t paying valuable dollars for an aging vehicle.
Invest in fleet management software
Fleet management software automates key tasks like vehicle tracking, fuel usage, and driver monitoring, helping to reduce costs and boost efficiency. With fleet costs for 10 vehicles averaging $6,186 per year, utilizing fleet management tools can enhance routing, prolong vehicle lifespan, and inform more intelligent business decisions. Here is more about those features:
- Vehicle tracking: GPS devices can help optimize driver routes and collect data such as vehicle speed, distance traveled, and location.
- Driving behavior analysis: Determine whether a driver has a habit of overusing the brakes, speeding, or idling in one place for too long. This information can be used to create actionable items to resolve reported issues.
- Fuel management: Monitor fuel usage and costs so you can make cost-effective decisions for your fleet, such as reducing idling or examining current routes to see where shortcuts can be made.
- Route monitoring: Track the progress of vehicles along specific routes and identify real-time delays to help keep the fleet running efficiently.
Top vendors for fleet management solutions
Several GPS and fleet tracking tools are designed specifically for small businesses. These platforms offer scalable features to help you monitor vehicle locations, streamline maintenance schedules, and improve driver performance. Here are a few highly rated options:
- Azuga. Azuga offers AI-powered driver behavior tracking, making it a strong choice for businesses focused on safety and compliance. Its mobile-friendly tools support vehicle diagnostics and fleet efficiency enhancements.
- Fleetio. Ideal for teams that manage vehicle maintenance in-house and prioritize process automation, Fleetio offers a straightforward, cloud-based platform for tracking work orders, inspections, and parts inventory.
- Samsara. Known for its real-time GPS tracking and user-friendly dashboard, Samsara helps small businesses improve route efficiency and vehicle safety. It also includes insightful analytics and integration with fuel usage monitoring.
- Verizon Connect. A reliable choice for small to midsize fleets, Verizon Connect includes customizable alerts, maintenance tracking, and geofencing capabilities to protect and optimize your fleet.
Explore more options and considerations in our guide to fleet management tools.
Recognize the demands of each vehicle
Make sure you’re not underinspecting (or overinspecting) a vehicle, as this can lead to increased costs and maintenance issues. Depending on the make and model, one car may need more maintenance than another in the same fleet. Through proper fleet analysis, you can know whether it’s time to dispose of a vehicle or if it just needs a tune-up.
Monitor the cost of ownership
Sometimes the cost of keeping a vehicle in operation consumes more money than it's worth. Keep an eye on the cost of ownership to make sure you aren’t paying valuable dollars for an aging vehicle. Understanding market trends and where a vehicle is in its lifespan is crucial in determining when to buy a new one.
Evaluate the effectiveness of your vehicle program, and make adjustments as needed
Data is worthless if it’s not acted on, which is why long-term analysis and adjustments are necessary for growth. Reviewing data collected over time can help you make decisions that affect the future of your business, such as implementing route changes or improving maintenance protocols.
Look for recurring patterns and avoid getting stuck on one dataset. In other words, keep your eyes on the bigger picture.
Track and reduce fuel expenses across your fleet
Without proper oversight and management, fuel costs quickly eat into your bottom line. Here are some effective strategies for reducing fuel costs:
- Invest in fuel-efficient vehicles. When updating or expanding your fleet, consider hybrid or fuel-efficient vehicles that can significantly reduce fuel consumption over time.
- Implement a fuel card program. Fuel cards provide real-time spending data, simplify expense tracking, and help prevent unauthorized purchases. This gives you better control over your fuel costs.
- Encourage route optimization. Use GPS data to identify and assign the most efficient routes, reducing unnecessary mileage and idle time. (Many of the top fleet management platforms include route optimization features as part of their base package.)
- Reward fuel-conscious drivers. Incentivize drivers who consistently improve fuel economy by recognizing or rewarding smart driving habits.
- Provide driver training. Educate team members on how to reduce fuel consumption through smooth acceleration, minimal idling, and maintaining a consistent speed when driving.
Remember, small changes in daily operations can result in substantial fuel savings over time.
[Read more: How to Track Company Vehicle Use as a Small Business]
Take tax deductions for your vehicle use
Using company vehicles for business purposes may qualify you for valuable tax deductions, which can help reduce your overall taxable income. The IRS allows small businesses to deduct vehicle-related expenses in one of two ways: using the standard mileage rate or tracking actual costs.
The standard mileage rate is a simplified method for determining the cost of driving. For tax year 2025, the IRS set the rate at 70 cents per mile traveled for business purposes. This method is often easier to manage and works well for businesses with consistent travel patterns.
The actual expense method, on the other hand, allows you to deduct specific costs, such as gas, oil changes, repairs, insurance, and depreciation. This can be beneficial if your vehicle has high operating expenses, but it requires that you keep detailed documentation of all vehicle costs throughout the year.
To stay compliant and maximize deductions, choose the method that offers the most significant benefit, and maintain accurate records of mileage and receipts. Fleet management software or mileage tracking apps can make this process much easier at tax time.
Sammi Caramela contributed to this article.
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