Many business owners mistakenly believe that a GPS tracking system is too expensive or not valuable enough to justify the investment. To the contrary, the return on investment you will get from reduced fuel costs and improved performance make fleet GPS well worth the initial costs. In fact, many business owners find that the system pays for itself in less than a year, often in less than six months. After that, the monthly savings continue as long as you keep using GPS tracking.
This article addresses the reduced fuel cost component of calculating your ROI; stay tuned for a second installment about how improved performance also contributes to lower operating costs.
Reducing Fuel Costs with GPS Tracking
Vehicle idling is one of the biggest contributors to unnecessary fuel consumption and costs. According to Argonne National Laboratory, engine idling can consume between 0.64 and 1.03 gallons of fuel per hour, depending on the vehicle. These numbers increase when the air conditioning is on in the summer months.
So what does this mean for your business? Of course, it depends on how many vehicles you have, what type they are, and how long your drivers allow the engine to idle. While some engine idling can’t be avoided, driver behavior can be modified to reduce idling time that is avoidable. Let’s look at an example:
Assume you have 10 vehicles in your fleet and each vehicle consumes 0.8 gallons of fuel per hour while idling. If your drivers allow the engine to idle for an hour over the course of the day, that is 5 hours of avoidable idling time per driver per week. Assuming every driver works 50 weeks per year, your annual fuel costs due to avoidable idling can quickly add up.
0.8 gal/hr x 5 hrs/week x 50 weeks/year x $3.00/gal x 10 vehicles = $6,000/year
If you’re like most business owners, you can easily think of a better way to spend $6,000.
Fuel savings is not the only factor that contributes to the ROI of GPS tracking. You will also save money on payroll, insurance, and section 179 tax incentives. Your fixed costs will be more than covered by the savings you will generate, and if you use your GPS tracking system to its fullest potential, it can save you a lot of money in the long run.
For more information about how GPS tracking can help your business save money, contact the experts at GPSTrackIt. We’ll work with you to create a custom estimate of the amount of time it will take to get a return on your investment and the long-term savings you will get with fleet GPS. Contact us today to schedule a consultation.
How much money do you think you could save on fuel with GPS tracking?