FLEET MANAGEMENT
Excess charges
These are such costs as excess accident
insurance or those incurred from breaching
lease contractual terms and conditions. If your
organisation permits employees to use vehicles
for personal use, including commuting to and
from work, you may be required to pay Fringe
Benefit Tax (FBT). FBT is levied at 20% of the FBT
vehicle value for any new vehicle acquisitions.
Personal use charges
The organisation needs to clearly articulate
its policy regarding the costs to be charged
for employee personal use (if any). Amounts
recovered through this process should be
recognised in the whole of life cost calculation.
Fair wear and tear and excess kilometre or
time charges
You need to assess the likelihood of incurring
these charges. If you have been liable for these
in the past, it’s quite likely that they will be
incurred in the future, so include a factor for
anticipated excess charges.
The bottom line
To see the total costs of vehicle ownership
simply add the fixed costs and operating costs
together. It is sometimes useful to break the
total lifecycle cost into kilometres. This provides
a common way by which you can benchmark
your fleet against other organisations.
To determine the cents per kilometre costs take
the Estimated Lifecycle cost divided by the total
lifetime kilometres travelled.
Ken Thompson
Director of Research &
Communications, AfMA
Ken has a background in
telecommunications and Project
Management in both Europe and
Australia. He holds a master in Innovation
and Service Management, a degree
in Management Studies, a Company
Directors Diploma and is a fellow of the
Australian Institute of Company Directors.
Ken’s role is to analysis the Automotive
and Fleet Industries and formulate
policies and submissions to protect the
Association members’ interests. Ken also
represents AfMA at State and Federal
Government hearings.
The Australasian Fleet Management
Association (AfMA) is a not-for-profit
organisation with over 600 members
throughout Australia and New Zealand.
AfMA’s membership base is represented
across all industries and levels of
government and is responsible for the
management of approximately 800,000
fleet vehicles. Our charter is to enhance
Fleet Management as a profession in
its own right, to provide knowledge,
information and resources to our
Members and to lobby and advocate on
behalf of the fleet industry.
Members have access to resources and
a network of industry professionals
to assist them in the strategic and
operational management of their fleet.
In summary
There is no reason why the fleet should be
managed differently than any other company
function. Doing it right can reduce your cost
substantially. Taking an out of sight out of mind
approach and leaving the fleet cost in the dark
is not recommended and can end up as a very
expensive error.
Govlink I Issue 1 2014
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