Proper Care of Company Vehicles Seen Saving Money Down the Road
What follows are some tips to help economize:
- Justify each company car. Is it really used for business, or is
it a perk that you offer because you always have? Do you have your
family vehicles tied in to your company?
- Keep the vehicles in tip-top condition. A small expenditure
here can save you big-time down the road. Many people do not
realize the dramatic effects of proper maintenance. For example, a
relatively small increase in fuel efficiency can lead to many
thousands in savings over the long haul. If you drive 100,000 miles
a year and spend $1.50 on average for fuel, a half mile per hour
improvement in fuel efficiency leads to an annual savings of almost
- Keep a maintenance log in writing. You want a record of each
vehicle and how it was taken care of. Regular tune-ups, preventive
maintenance and proper care of the vehicle are all easier when a
log is kept.
Proper maintenance can also prevent costly accidents. The National Safety Council reports that the total annual cost of accidents and workplace injuries in the U.S. is more than $126 billion.
- Comparison shop for insurance. Prices for the same coverage can vary significantly from company to company. You should get at least three different quotes. Call your state insurance department for ideas about companies and agents to contact. To find a listing for your state's department, visit the National Association of Insurance Commissioners' Web site at www.naic.org/splash.htm.
Also, check the financial ratings of insurance companies with one of the major ratings services. The following provide free information on the claims-paying ability ratings of companies: Standard & Poor's at www.standardpoor.com, (212) 208-1146; Duff & Phelps Credit Rating Co. at www.dcrco.com, (212) 908-0200; and Moody's Investor Service at www.moodys.com, (212) 553-0300.
Ask for higher deductibles to lower costs. Deductibles represent
the amount of money you pay before your insurance company fulfills
a claim. By requesting higher deductibles on collision and
comprehensive (fire and theft) coverage, you can lower your
insurance costs substantially. For example, increasing your
deductible from $200 to $500 could reduce your collision and
comprehensive cost by 15% to 30%.
- Consider specialty coverages. Adding supplemental insurance
coverages like towing and labor or car rental reimbursement to your
basic auto insurance policy may save you money. For example, for an
average of $1 or $2 a month added to your auto insurance, you can
purchase coverage that will pay for your rental car while your car
is being repaired from an accident. If you have this or some other
specialty insurance, be sure to remind your insurance company or
agent when you file a claim.
Two other coverages you may wish to consider: (1) Uninsured motorists (UM) coverage pays for your injuries if you're struck by a hit-and-run driver or someone who doesn't have auto insurance; (2) Underinsured motorists (UIM) coverage will pay out if the driver who hit you causes more damage than his or her liability coverage can cover. In some states, UM or UIM coverage will also pay for property damages. Given the prevalence of uninsured drivers nationally, this coverage is essential. On average, it costs less than $40 a year for $100,000 worth, and will make up for anything your medical insurance doesn't cover.
- Examine leasing plans instead of an outright
- Lease or purchase a "Low Profile, Low Maintenance" car. Cars
that are expensive to repair, or that are favorite targets for
thieves, are not the way to go.
- Negotiate for free oil changes by the dealership when buying a new car. Consider that oil changes cost approximately $30 every 3,000 miles. For a company car, that can even be once every six weeks. With free oil changes stipulated in a contract, you'll save $270 a year...