Five Trends in Fleet and the Benefits of a Fleet Mileage Tracking App
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Five Trends in Fleet and the Benefits of a Fleet Mileage Tracking App

head shot of CRO Christian Miller By Christian Miller December 21, 2022

Categories: Mobile Workforce Vehicle Reimbursement

Have concerns about reducing fleet costs in 2023? Making a plan that confronts those costs, one that solves for inflation, reduces costs, manages risks and everything else? That’s a challenge. Now add providing flexibility for your next generation of fleet and non-fleet drivers that value freedom of choice. That might just tip things over the top. There are a lot of factors impacting companies with fleets: personal use taxes, consolidation with fleet management companies, inflation, interest rates and more. Let’s dig into these trends and take a look at how a fleet mileage tracking app might be of use. 

Five Trends for Companies with a Fleet in 2023  

Heading into 2023, companies with fleet vehicles have a lot on their plates. From end of year issues and fleet market consolidation to inflation and sky-high interest rates, it’s been a tough year. Fortunately, a fleet mileage tracking app can provide significant benefits to companies in need. But first, let’s dig into these notable trends. 

1). End of the Year Issues 

Companies with fleet vehicles face some big hurdles at the end of the year. On the employee side, they’re just getting hit with taxation on personal use mileage for the entire year. Whether they’ve been on top of tracking their personal use or not, they’re probably not liking the number they’re looking at. On the company side, things look a little different. 

Businesses are doing internal audits for personal use chargeback amounts, tracking down logs that might not be completely accurate. That’s not to necessarily a cost-savings measure. More than anything, it’s an effort to protect company. During this time of year, maintaining IRS compliance and avoiding a costly audit become top priorities. And that’s a process that becomes easier with a fleet mileage tracking app. 

2). Fleet Market Consolidation 

LeasePlan USA and Wheels Donlen, two of the biggest fleet management companies in the business, announced they’ve completed their merger. What does that mean for companies in fleet today? On the one hand, it means Wheels Donlen LeasePlan will have a broader reach, providing fleet solutions not only in more areas of the United States, but globally. On the other hand, with this merger, the field of competitors in the fleet management space has gotten thinner. That consolidation means fewer options helping solve fundamental fleet issues. With fewer fleet management companies, the competition fails to approach these fundamental issues in new ways. At a time when fleet managers need different solutions to combat the challenge of rising fleet costs, fewer providers encourage them to look elsewhere.  

3). Inflation 

The rate of inflation has fallen over the past several months, from 8.2% in September to 7.7% in October before reaching 7.1% in November. This downward trend is a good one, but we’re far from out of the woods. While the price of gas sits around the same rate we saw before the war in Ukraine sent it skyrocketing, other prices have increased. That includes the price of new vehicles. 

According to Kelley Blue Book, the average new car in November cost $48,681. The price increased by $422 from October and sits $2,250 higher than the cost in November of 2021. Part of the issue is the continuing microchip shortage limiting auto manufacturers. With new vehicles growing more and more expensive, the company-provided car continues to be a costly perk.  

4). Interest Rates 

Buying a new car isn’t the only thing that has become more expensive. Paying for one has become more costly as well. The culprit here is interest rate. The U.S. Federal Reserve has raised this rate multiple times in an effort to combat inflation. Increased interest rates make big purchases less desirable. By decreasing big purchases they hope to slow price growth. Let’s look at how high interest rates affect purchasing a new vehicle with an example. 

Greg just bought a $50,000 car. Like so many people, Greg can’t afford to pay for this vehicle in cash. A $50,000 vehicle at a normal interest rate of 3.5% will result in the buyer paying an additional $4,500 over four years.  With the high interest rate of 6.5%, Greg will be paying $8,500 over those four years. That’s an additional $4,000, and that’s not great for Greg. Now multiply that additional expense by the number of fleet vehicles a company is buying or leasing, and you’ll see they have a much larger expense to swallow.  

5). The Changing Business Environment 

We no longer work the same way we used to. Technology has enabled us to meet virtually through a number of video communication software. The change has reduced mileage in the service business by 20% and in sales business 40%. You can pose questions about face-to-face efficacy and online efficiency, but when it comes down to it, the questions to ask are these: did you invest in fleet vehicles as a tool your employees leverage? Or a perk your company continues to pay for? Is it a necessary tool if employees drive the same number of business miles as they do personal miles? How much would a fleet mileage tracking app benefit your company?   

What is a fleet mileage tracking app? 

A fleet mileage tracking app is an app that employees driving fleet vehicles use to track their mileage. Manual mileage tracking, simply recording miles at the beginning and end of each trip, can lead to mistakes and may not hold up in the event of an audit. Companies with fleets use these apps because of their numerous benefits. 

The Benefits of a Fleet Mileage Tracking App 

Whether you’re in the market for new fleet vehicles or still searching for the best way to manage personal use, a fleet mileage tracking app might be your short-term answer. The impact can be immediate and provides your company with actionable insights in as little as one month. So what all does a fleet mileage tracing app accomplish? Let’s take a look.   

Audit Risk Reduction 

Any company that allows employees to drive fleet vehicles for personal use is providing them with a taxable benefit. That means that the personal miles driven must be accounted and paid for. Employees don’t often keep a record of these miles, exposing both themselves and the company to audit risk. With a fleet mileage tracking app, employees can easily capture their business and personal mileage.  

Simplify Chargebacks 

When employees don’t record mileage, employers often charge a monthly rate, or wait until the end of the year. But, without the accuracy of exact mileage, this rate is a guessing game. Adopting a fleet mileage tracking app means mitigating audit risk and keeping the chargebacks simple. Employees log their personal miles, and employers charge for them. 

Fairness and Accuracy 

Without personal use mileage logs, employers are either charging too much or too little. There’s no in between. Employees that don’t drive their fleet vehicle outside of work will be overcharged. Employees who drive their fleet vehicle more for personal than business use will be undercharged. With a fleet mileage tracking app, personal use charge backs become fair and accurate. Employees will only have to pay for their personal miles. This is also fairer to the company, who will now receive the proper amount.   

Driving Workforce Insights 

In addition to the compliance, simplicity and fairness benefits, a fleet mileage tracking app can also provide something all companies with fleet vehicles want, but few have. Insight into their driving workforce’s behavior. It’s not as complicated as “they took a left on this route when taking a right would’ve saved them 0.2 miles in gas!” In fact, it’s as simple as “is your fleet being used more for personal or business driving?” The answer to that question may help you decide the future of your fleet. 

Taking Next Steps with Motus 

Head into the new year with the immediate benefits a fleet mileage tracking app can provide your company. Motus Fleet Solutions ensure miles are accurately captured and charges are accurately calculated with our best-in-class platform. Interested in learning more? Contact us to start a conversation about controlling your personal use chargebacks today! 

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