By Ben Reiland
December 15, 2022
As the owner of a vehicle fleet, you’re always looking to save money wherever possible — especially given the high cost of gasoline in recent years. A fleet fuel card is an excellent way to control company expenses and save some money in the long term. Not only can you set your own purchasing limits, but you can also manage and track costs across drivers and vehicles and choose when and where your drivers can purchase fuel.
But what is a fleet card, anyway, and how much do fuel cards cost? Let’s dive in.
Essentially, fleet fuel cards are gas cards for companies with fleet vehicles that allow you to limit spending on gasoline, and they’re accepted by most national fuel companies nationwide.
Fleet gas cards function nearly the same way as business credit cards. When you fill the tank of a fleet vehicle, you’ll just insert your card and provide whatever authorization is required. Depending on the fuel card and fleet owner preferences, this may be the driver number, unit number or current mileage, which may be used for tracking or reporting.
Companies of any size with fleet vehicles can use and benefit from a fleet fuel card, from small plumbing fleets with five or fewer vehicles to national organizations with hundreds to thousands of cars. Keep in mind, however, that if your fleet purchases less than a thousand gallons of fuel per month, you might be better off with a business credit card that offers perks due to the fees and miscellaneous expenses associated with fleet fuel cards.
Fleet fuel cards have been designed for the convenience of companies that purchase over a thousand gallons of fuel each month. This is when the benefits — such as rebates and discounts — usually take effect.
Many fleet owners opt for fleet cards over business credit cards because of their extra benefits. Some of these are listed below.
One of the most significant benefits of a fleet fuel card is the savings you’ll experience at the pump through wholesale pricing. You can also get rebates on the fuel your business purchases, which give you money back just for using the card. Rewards may vary, but standard fleet gas cards tend to offer around five cents off per gallon — and some cards are tied to tiered programs, helping you save more money for purchasing more fuel.
With a fleet fuel card, drivers can also pay for gas more conveniently without having to use cash, checks, or personal credit cards, which come with the hassle of reimbursements. When you opt for a fleet card, all charges will show up on a single bill, so you won’t have to hunt down receipts, check odometers or worry about extra paperwork.
Even better, fleet owners can control transactions by limiting purchase amounts and frequencies. Some advanced fleet gas cards are even accompanied by online platforms where you can manage rules for each driver’s card to keep drivers from excessive spending while on the road. For example, you might be able to use some platforms to limit purchases by the time of day, day of the week or transaction amount.
Having this much control over expenditures can also help reduce your risk of theft and fraud. You’ll be able to freeze your account in one click so that the moment you see a suspicious alert, the card won’t work anymore.
As you track driver purchases over time, you’ll enjoy long-term insights into the cost trends among your fleet. You will see much sooner which driver actions negatively impact your bottom line and what each vehicle in the fleet needs to stay in good condition. As you identify these trends, you can address the expenditures in those areas and take corrective action.
Although fleet fuel cards are convenient, they have some drawbacks and cannot replace business credit cards entirely. Some of the disadvantages of fuel cards are mentioned below.
Each fleet card has a unique fee structure. While one card might charge a flat $10 monthly fee, another may charge $3 per month per card — which becomes costly if you have hundreds to thousands of drivers. Before choosing a card, you’ll want to determine the interest rate and all associated fees and how often they’re charged.
Types of fees can include transaction fees, maintenance fees, setup fees, late fees, etc. Make sure to ask the card provider about their fee structure, so you don’t have any unpleasant surprises when your first invoice shows up. Sometimes, you can find fleet gas cards that will waive certain fees to reward you for purchasing a specific quantity of gasoline in a month.
Even with advanced insights into fuel spend, employers still don’t know how much of the gas purchased is used on personal miles versus business miles. While setting limits on when gas can be purchased has its benefits, employees can still work around this. One solution to ensuring accuracy is a fleet mileage tracking app. This allows employees to record personal miles accurately, ensuring a level of compliance that mitigates risk of an IRS audit.
For most of your business credit cards, you probably pay them off once per month or so. But with fleet fuel cards, you may have to make more regular payments. Some require weekly or bi-weekly card payments, so find out the terms ahead of time in case you won’t be able to pay the balance off more than once per month.
Because fleet fuel cards only allow for fuel and sometimes maintenance expenses, you may have to provide employees with an additional business credit card if they need to make other miscellaneous business purchases. Some cards may also limit you to using only specific merchants in select geographical regions.
As a fleet owner in this economy, you’ve probably worried about how much fuel cards cost. In your search for the right fleet fuel card, you’ll notice that every provider has its own fees for transactions, account setup, APR, check processing, program administration, bank handling and more. In short, the cost of a fuel card depends on which fuel card company you choose and the type of card you select.
First, let’s discuss the differences between cost-based and retail fuel card pricing so you can make the best decision for your business.
Retail and cost-based pricing are the two most common arrangements for fuel card pricing.
Retail fuel card pricing is based on the price you see listed at the gas pump. So, you’ll pay the retail price and receive a rebate later based on how much gas you bought. In most cases, fuel cards use retail pricing because of the wider availability of retail truck stops and fuel stations than members-only stations designed for commercial vehicles with fuel cards.
Cost-based fuel card pricing is set using the market-related fuel cost provided by entities such as the Oil Price Information Service (OPIS). This means you’ll pay the price determined by OPIS instead of the full retail price, which can be helpful when driving in places with high transportation costs.
Now that you’re familiar with fuel cards, their pricing arrangements, and associated fees, let’s look at the pros and cons of some popular fleet fuel card providers. You’ll have to decide on the best fleet fuel card based on your unique needs.
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As you can see, fleet fuel cards can be a very convenient tool for fleet owners hoping to save on gas and control company expenses. Businesses whose model involves extensive transportation and purchasing over a thousand gallons of gas per month would do well to obtain a fleet card. You will enjoy valuable metrics, controls, and rewards that help your profit margins. Just be sure to equip your driving employees with a fleet mileage tracking app that guarantees an accurate personal use chargeback. Interested in the ways a mileage tracking app can pair with a fuel card and benefit your company?
With Motus, accurately capturing business mileage has never been faster or easier.
Contact us today or take a virtual tour of the Motus Platform.
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