Whether your business has a fleet of 5 or 500 vehicles, we have the fleet management software priced right for your business. This is full featured fleet management software that helps you keep costs up to date and your service & expense data organized and easy to access. All at a cost that makes sense. It's powerful, versatile, low-cost fleet management software.
While FleetCUBE Online is inexpensive, we haven't skimped on features. You get vehicle asset management, expense tracking, tyre management, Driver details, dealer records, inventory tracking, network compatibility, profile-based user security, a wide selection of management reports, and more.
You also get the professional, courteous product support you expect and deserve.
Introduction
• A world best web-based fleet management system
• It is an application that has been developed specifically for the internet environment
• Utilises the very latest IT technologies
• Can be accessed from any PC anywhere and anytime, internationally – all that is required is an internet browser
• Requires no client software (i.e. software required on each PC). This allows the application to be centrally administered, with no more sending of program and database updates out to individual sites. This also means low cost of ownership.
• Is very ‘thin’ – in that it needs minimal network requirements
• Is hugely scalable i.e. the database engine can be changed to suit customer’s preferences and can support hundreds or thousands of concurrent users
• Multi-site operation – even across national borders
• Multi-level breakdown of company organisation
• Flexible screens – add your own fields, text, calculations, corporate branding
• Password controlled access down to driver level
• Accurate and up-to-date costings – highlights high cost areas
• Identifies warranty claims for work that might otherwise be paid for and identifies work carried out at other depots
• Schedules diary dates for operational requirements
• Highlights out of line vehicles and drivers
• Warns of statutory requirements in advance
• Fleet card input can be programmed for local operations
• Tracking data can be programmed into your reports
Main Modules
My fleet
Operation that includes Fuel, Tolls, Maintenance, Tyres, inspections, Vehicle License Renewals and Trip Logs
Fleet Administration
Suppliers, this could be dealers, workshops or any supplier your fleet deal with
Safety Management
Diver details
Fines management, includes AARTO management
Accident Management
License management
Asset Management
Vehicle details including vehicle selection lists
Purchasing to Replacement
Utilisation and right sizing
Remarketing
Reports
Over 20 pre loaded reports
Custom reports can be created on request
Report can be scheduled to be emailed on a preset basis to I Pad and PDA
Tools
Fleet management calculators and Fleet Analytics
FleetCUBE Online pricing
Pricing is based on the number of vehicles ‘active’ on the system at your month end. There is no charge for the retention of non active vehicles/ information on the client’s data base – i.e. sold vehicles etc.
0 - 500 vehicles R 65.00 p/vehicle p/month
500 - 1000 vehicles R 60.00 p/vehicle p/month
1000 - 5000 vehicles R 55.00 p/vehicle p/month 5000+ vehicles R50.00 p/vehicle p/month
The above fees are all Excl VAT
A six percent annual escalation is applicable from your fleet take on date.
A Pricing comparison –
• 100 vehicles cost about R11.5 million a year in a normal operation.
• 100 vehicles times R65 per month per vehicle equals R78 000 a year
• This cost is equal to 0.68% of your total operating costs
• With proper operating cost and management control on your drivers and vehicles you could reduce your total costs in excess of 9% or about R1 million!
Contact Mari Theron 011 782 9211 for more information on FleetCUBE Online
Monday 07 November 2011
Wednesday 13 July 2011
Training in these difficult times
There is a constant dilemma in every organisation, particularly in these economic times – how do you justify the costs and ‘time off the job’ for employee training. And yet the overall efficiency of a company depends on the current expertise of its employees.
During protracted times of economic downturn the first thing that tends to be cut by companies is employee training. We recently heard that a major government organisation has only allocated R10 000 for fleet management training for their current financial year! Talking to other companies it sometimes seems that training projects are seen as luxuries rather than part of their business planning.
If you want run your fleet on a cost effective basis, training of your fleet management staff has to become a long term strategy rather than a short term fix. Fleet managers need to have specific fleet management skills and need to play a serious part in the overall company’s strategic planning. With a fleet of 100 vehicles costing some R11 million a year and assets valued at about R15 million, this is not a job for just anybody in your organisation.
Cutting your training budget might save you some costs in the short term but it will definitely have a long term effect on your fleet operating costs in the long term. Without solid fleet management expertise and specific KPIs, your fleet manager could well be having a difficult time meeting this year’s budgets.
FleetCUBE company audits on fleet operations have shown that the average fleet’s costs are about 18% higher than they should be. The main reason has always been the lack of fleet management expertise at executive and fleet manager level.
Executive management must take the lead in developing and maintaining their levels of fleet management expertise in their companies. Every rand saved on your fleet operating costs goes directly to your bottom line and this in turn has a beneficial impact on your total business turn over.
The effective return for your training investment
The FleetCUBE five day intensive fleet management training course costs R15 538 (incl VAT) a person.
The operating costs for a fleet of 100 vehicles is R11 million. This makes the cost of the course about 0.15% of your operating costs. AND the potential benefit is that a well trained fleet manager should be able to reduce these operating costs by at least 8% - an annual saving of R880 000 a year!
Contact Cheri Louw at our offices 011 782 9211 for more information on the FleetCUBE internationally recognised fleet management training courses.
During protracted times of economic downturn the first thing that tends to be cut by companies is employee training. We recently heard that a major government organisation has only allocated R10 000 for fleet management training for their current financial year! Talking to other companies it sometimes seems that training projects are seen as luxuries rather than part of their business planning.
If you want run your fleet on a cost effective basis, training of your fleet management staff has to become a long term strategy rather than a short term fix. Fleet managers need to have specific fleet management skills and need to play a serious part in the overall company’s strategic planning. With a fleet of 100 vehicles costing some R11 million a year and assets valued at about R15 million, this is not a job for just anybody in your organisation.
Cutting your training budget might save you some costs in the short term but it will definitely have a long term effect on your fleet operating costs in the long term. Without solid fleet management expertise and specific KPIs, your fleet manager could well be having a difficult time meeting this year’s budgets.
FleetCUBE company audits on fleet operations have shown that the average fleet’s costs are about 18% higher than they should be. The main reason has always been the lack of fleet management expertise at executive and fleet manager level.
Executive management must take the lead in developing and maintaining their levels of fleet management expertise in their companies. Every rand saved on your fleet operating costs goes directly to your bottom line and this in turn has a beneficial impact on your total business turn over.
The effective return for your training investment
The FleetCUBE five day intensive fleet management training course costs R15 538 (incl VAT) a person.
The operating costs for a fleet of 100 vehicles is R11 million. This makes the cost of the course about 0.15% of your operating costs. AND the potential benefit is that a well trained fleet manager should be able to reduce these operating costs by at least 8% - an annual saving of R880 000 a year!
Contact Cheri Louw at our offices 011 782 9211 for more information on the FleetCUBE internationally recognised fleet management training courses.
Tuesday 22 March 2011
FLEET SAFETY PROGRAMMES
‘YOU NEED TO MAKE A COMMITMENT TO YOUR SAFETY PROGRAMME.’
If your company has drivers on the road, you are already exposed to major financial liabilities which may result from vehicle accidents. By investing in fleet safety, you can save lives, prevent injuries, increase productivity and significantly minimize your company’s exposure to ever increasing accident costs.
Vehicle accidents are probably our number one cause of job related deaths. In addition to the obvious property damage and pain, both physical and emotional, vehicle accidents are tremendously costly.
From minor fender benders to catastrophic fatal crashes, today’s average accident costs about R25 000. Fifty percent of your fleet is likely to be involved in an accident each year, so calculate your costs.
When it comes to driving standards and the high rate of accidents and personal injuries, one wonders why fleet owners do not pay more attention to this aspect of fleet management. This is particularly important when it comes to accident analysis.
These programmes are an essential part of driver safety management and form part of the company’s accident management programme.
“A pedestrian hit me and went under the car”. “In an attempt to kill a fly, I drove into a telephone pole.”
These are statements that, hopefully, you will never hear from one of your drivers. However, if your company does not have a very good safety programme in place – you may hear them and other similar stories.
US fleet owners have always been very concerned about safety programmes. Safety surveys have shown that the average accident ratio in US fleets was down to 8%. Many fleet owners think they are doing well when their accident ratio is down to 25%.
This area of fleet management has to receive a lot more attention. The first element of a fleet safety programme is a commitment to LOSS CONTROL. Everyone in the company – management, drivers and fleet managers - must demonstrate a strong commitment to safety. It all comes down to correct driver attitudes and behaviour.
Other elements include the proper development, co-ordination and implementation of your policy. Elements of the policy need to include the objectives, purpose and performance standards, and well-documented reports.
All accidents need to be examined properly.
There are ways to overcome this. One way is to meet with the driver and find out if he or she lacks the basic knowledge regarding safe driving habits. Also investigate the accident thoroughly and document your findings properly. If you can, design your own reporting forms and charts. Keep them simple, but record all the facts.
This is where the accident committee has to play a vital role in the safety and accident management process.
Don’t rely on the insurance broker – their summaries are usually no more than a listing of events and costs. Very little information relating to accident control is ever included. It is important to discover accident TRENDS in order to identify accident patterns that may be developing. So the simple question has to be: “Did you identify a trend and if so, what action have you taken to educate, advise or warn drivers about these current driving hazards.
Many fleet owners send their drivers on defensive driving courses with very good result. One fleet of some 400 vehicles cut their accident rate by half, over a period of eighteen months. The repair costs were also reduced by about 25%. So it is possible to do something specific about your accident trends and costs.
Another idea is to evaluate driving abilities and accident histories at the time the employee is hired. However, in the end it is up to – the Fleet Manager – to implement a proper fleet safety programme in the company.
THE TOTAL SOLUTION:
A Safety Programme should:
1. Reduce accidents, injuries, lost time and liability risks
2. Meet driver training requirements efficiently
3. Lower your overall fleet operating costs
A Safety Programmes enables your company to avoid many of the costs and unfortunate results of vehicle accidents, while increasing driver safety and security. If you are concerned about getting assistance you could give us at FleetCUBE a call. Fleetcube has a fully developed Safety Programme that can be implemented in your company. FleetCUBE can also offer you a complete internet based AARTO/ Driver management system.
SAFETY POLICY IMPLEMENTATION:
By creating a viable organization- wide policy, you can take a giant first step towards providing cost saving accident protection for your entire fleet. What’s more, a high quality, well managed safety programme will increase your organization's productivity. Above all, it can save lives.
DRIVER EVALUATION AND RECORD KEEPING:
Driver error is a primary or contributing cause in 94 percent of vehicle accidents. Yet, many fleet managers know very little about the people who drive on company business. A proper programme includes verification of driver’s licenses, evaluation of records and maintenance of a complete accurate driver information base.
The process needs to start even before employees are appointed. It must form part of the company’s HR policy. Part of the documentation for a new employee must relate to the driver’s policy manual (An appropriate extract from the main fleet policy document). This document must be signed by the employee.
In some companies a new employee has to go on a drivers training course before being allowed to drive a company vehicle.
SAFETY TRAINING:
Different types of driver safety training to meet varying organizational requirements are essential. The more intense behind-the-wheel training, live presentations and videotape programmes should be designed to suit your organizations particular needs and budget, whether your needs involve the improvement of driving skills, risk evaluation techniques or driver attitudes.
EMERGENCY ROADSIDE ASSISTANCE PLANS:
Give your drivers around-the-clock peace of mind. With just one toll-free call, these nationwide services and towing networks are available 24 hours a day, 365 days a year, to provide your drivers with “on-the-spot” help. Consider using one for your fleet. However, make sure that your drivers know which service is contracted to your fleet.
ACCIDENT REPORTING AND REPAIR MANAGEMENT:
The first step in reducing accidents is to understand their causes and effects. But to draw useful conclusions, your accident data must be complete. You need the correct information on all your accidents. You must also be able to solve four of the toughest challenges associated with fleet accidents:
• Obtaining accident reports from drivers;
• recording accident information consistently in a uniform manner within a centralised database,
• repairing vehicles properly at the right cost
• managing claims recovery.
CLAIMS RECOVERY:
Every accident should be reviewed for any possible claims recovery. After gathering all necessary information, you should aggressively pursue reimbursement from all accident related expenses from the party at fault. This will go a long way to reducing costs.
VEHICLE SAFETY EQUIPMENT KIT:
Always inconvenient and usually costly, vehicle breakdowns can also be frightening and even dangerous. Provide your fleet with vehicle safety equipment kits. You can meet your drivers’ needs for personal and vehicle safety while supplying remedies for common breakdowns.
SAFETY SAVES!
Your ultimate goal must be to prevent accidents within your fleet and reduce the severity of those that do occur. In addition to the obvious reduction in property damage, pain and suffering, the bottom line of your efforts should show a real rand saving for your organization each year.
THIS IS AN EXAMPLE OF THE TYPE OF INFORMATION NEEDED TO CONTROL A FLEET ACCIDENT AND SAFETY PROGRAMME
FLEET ACCIDENT RESULTS
QUARTER YEAR
1. TOTAL VEHICLES
2. TOTAL KILOMETRES DRIVEN
3. AVERAGE KMS PER VEHICLE
4. TOTAL ACCIDENTS REPORTED:
PREVENTABLE ACCIDENTS
NON-PREVENTABLE ACCIDENTS
5. PERSONAL INJURIES
6. FATALITIES
7. TOTAL VEHICLE DAMAGE
8. AVERAGE VEHICLE DAMAGE
9. TOTAL ACCIDENT RATIO/MILLION KM
10. TOTAL PREVENTABLE ACCIDENT RATIO
11. TOTAL NON-PREVENTABLE ACCIDENT RATIO
It is important for you to realize that an insurance programme and its related costs are directly affected by the type of safety and accident management programme run by a company.
There is no one answer to these insurance and safety programmes. It requires constant appraisal by the fleet manager, who also has to apply appropriate penalties and incentives for bad or good driving.
If you are concerned about getting assistance you could give us at FleetCUBE a call. (011 782 9211). Fleetcube has a fully developed Safety Programme that can be implemented in your company. FleetCUBE can also offer you a complete internet based AARTO/ Driver management system.
If your company has drivers on the road, you are already exposed to major financial liabilities which may result from vehicle accidents. By investing in fleet safety, you can save lives, prevent injuries, increase productivity and significantly minimize your company’s exposure to ever increasing accident costs.
Vehicle accidents are probably our number one cause of job related deaths. In addition to the obvious property damage and pain, both physical and emotional, vehicle accidents are tremendously costly.
From minor fender benders to catastrophic fatal crashes, today’s average accident costs about R25 000. Fifty percent of your fleet is likely to be involved in an accident each year, so calculate your costs.
When it comes to driving standards and the high rate of accidents and personal injuries, one wonders why fleet owners do not pay more attention to this aspect of fleet management. This is particularly important when it comes to accident analysis.
These programmes are an essential part of driver safety management and form part of the company’s accident management programme.
“A pedestrian hit me and went under the car”. “In an attempt to kill a fly, I drove into a telephone pole.”
These are statements that, hopefully, you will never hear from one of your drivers. However, if your company does not have a very good safety programme in place – you may hear them and other similar stories.
US fleet owners have always been very concerned about safety programmes. Safety surveys have shown that the average accident ratio in US fleets was down to 8%. Many fleet owners think they are doing well when their accident ratio is down to 25%.
This area of fleet management has to receive a lot more attention. The first element of a fleet safety programme is a commitment to LOSS CONTROL. Everyone in the company – management, drivers and fleet managers - must demonstrate a strong commitment to safety. It all comes down to correct driver attitudes and behaviour.
Other elements include the proper development, co-ordination and implementation of your policy. Elements of the policy need to include the objectives, purpose and performance standards, and well-documented reports.
All accidents need to be examined properly.
There are ways to overcome this. One way is to meet with the driver and find out if he or she lacks the basic knowledge regarding safe driving habits. Also investigate the accident thoroughly and document your findings properly. If you can, design your own reporting forms and charts. Keep them simple, but record all the facts.
This is where the accident committee has to play a vital role in the safety and accident management process.
Don’t rely on the insurance broker – their summaries are usually no more than a listing of events and costs. Very little information relating to accident control is ever included. It is important to discover accident TRENDS in order to identify accident patterns that may be developing. So the simple question has to be: “Did you identify a trend and if so, what action have you taken to educate, advise or warn drivers about these current driving hazards.
Many fleet owners send their drivers on defensive driving courses with very good result. One fleet of some 400 vehicles cut their accident rate by half, over a period of eighteen months. The repair costs were also reduced by about 25%. So it is possible to do something specific about your accident trends and costs.
Another idea is to evaluate driving abilities and accident histories at the time the employee is hired. However, in the end it is up to – the Fleet Manager – to implement a proper fleet safety programme in the company.
THE TOTAL SOLUTION:
A Safety Programme should:
1. Reduce accidents, injuries, lost time and liability risks
2. Meet driver training requirements efficiently
3. Lower your overall fleet operating costs
A Safety Programmes enables your company to avoid many of the costs and unfortunate results of vehicle accidents, while increasing driver safety and security. If you are concerned about getting assistance you could give us at FleetCUBE a call. Fleetcube has a fully developed Safety Programme that can be implemented in your company. FleetCUBE can also offer you a complete internet based AARTO/ Driver management system.
SAFETY POLICY IMPLEMENTATION:
By creating a viable organization- wide policy, you can take a giant first step towards providing cost saving accident protection for your entire fleet. What’s more, a high quality, well managed safety programme will increase your organization's productivity. Above all, it can save lives.
DRIVER EVALUATION AND RECORD KEEPING:
Driver error is a primary or contributing cause in 94 percent of vehicle accidents. Yet, many fleet managers know very little about the people who drive on company business. A proper programme includes verification of driver’s licenses, evaluation of records and maintenance of a complete accurate driver information base.
The process needs to start even before employees are appointed. It must form part of the company’s HR policy. Part of the documentation for a new employee must relate to the driver’s policy manual (An appropriate extract from the main fleet policy document). This document must be signed by the employee.
In some companies a new employee has to go on a drivers training course before being allowed to drive a company vehicle.
SAFETY TRAINING:
Different types of driver safety training to meet varying organizational requirements are essential. The more intense behind-the-wheel training, live presentations and videotape programmes should be designed to suit your organizations particular needs and budget, whether your needs involve the improvement of driving skills, risk evaluation techniques or driver attitudes.
EMERGENCY ROADSIDE ASSISTANCE PLANS:
Give your drivers around-the-clock peace of mind. With just one toll-free call, these nationwide services and towing networks are available 24 hours a day, 365 days a year, to provide your drivers with “on-the-spot” help. Consider using one for your fleet. However, make sure that your drivers know which service is contracted to your fleet.
ACCIDENT REPORTING AND REPAIR MANAGEMENT:
The first step in reducing accidents is to understand their causes and effects. But to draw useful conclusions, your accident data must be complete. You need the correct information on all your accidents. You must also be able to solve four of the toughest challenges associated with fleet accidents:
• Obtaining accident reports from drivers;
• recording accident information consistently in a uniform manner within a centralised database,
• repairing vehicles properly at the right cost
• managing claims recovery.
CLAIMS RECOVERY:
Every accident should be reviewed for any possible claims recovery. After gathering all necessary information, you should aggressively pursue reimbursement from all accident related expenses from the party at fault. This will go a long way to reducing costs.
VEHICLE SAFETY EQUIPMENT KIT:
Always inconvenient and usually costly, vehicle breakdowns can also be frightening and even dangerous. Provide your fleet with vehicle safety equipment kits. You can meet your drivers’ needs for personal and vehicle safety while supplying remedies for common breakdowns.
SAFETY SAVES!
Your ultimate goal must be to prevent accidents within your fleet and reduce the severity of those that do occur. In addition to the obvious reduction in property damage, pain and suffering, the bottom line of your efforts should show a real rand saving for your organization each year.
THIS IS AN EXAMPLE OF THE TYPE OF INFORMATION NEEDED TO CONTROL A FLEET ACCIDENT AND SAFETY PROGRAMME
FLEET ACCIDENT RESULTS
QUARTER YEAR
1. TOTAL VEHICLES
2. TOTAL KILOMETRES DRIVEN
3. AVERAGE KMS PER VEHICLE
4. TOTAL ACCIDENTS REPORTED:
PREVENTABLE ACCIDENTS
NON-PREVENTABLE ACCIDENTS
5. PERSONAL INJURIES
6. FATALITIES
7. TOTAL VEHICLE DAMAGE
8. AVERAGE VEHICLE DAMAGE
9. TOTAL ACCIDENT RATIO/MILLION KM
10. TOTAL PREVENTABLE ACCIDENT RATIO
11. TOTAL NON-PREVENTABLE ACCIDENT RATIO
It is important for you to realize that an insurance programme and its related costs are directly affected by the type of safety and accident management programme run by a company.
There is no one answer to these insurance and safety programmes. It requires constant appraisal by the fleet manager, who also has to apply appropriate penalties and incentives for bad or good driving.
If you are concerned about getting assistance you could give us at FleetCUBE a call. (011 782 9211). Fleetcube has a fully developed Safety Programme that can be implemented in your company. FleetCUBE can also offer you a complete internet based AARTO/ Driver management system.
Wednesday 02 March 2011
Choosing between a company car and a car allowance
For many years a company car has been seen as part of an employment package. However, many employers still offer the option of a car or travel allowance which technically speaking could prove more financially beneficial to you and the company. There is a big proviso – the allowance has to be structured carefully and correctly.
In the Essential User part of the fleet a company car tends to be the norm. In the Executive Levels of the fleet a portion of the cost to company is offered as a car allowance- if a company car is not selected. The real question is – which is the best option.
The main issues revolve around matters such as - HR policies, the latest perks tax legislation and the new increases in individual taxes, fleet operating costs, personnel management, AARTO and accident management, driver needs, a pure perk or a essential need – to name but a few
Choosing the company car option?
The company car system is a well established part of employment policies in South Africa
The advantages of taking a company car:
• The level of car choice is usually related to a grade level. This varies from company to company and the type of industry. Industry competition ensures a competitive approach by companies to maintain the right level of vehicles on a selector list.
• The company usually covers all operating costs.
• Fuel costs are usually managed through a fleet card. Certain limits can be placed on the driver in terms of private use
• Services, maintenance and repairs are usually covered. However, abuse of the vehicle could mean the driver paying for certain costs.
• You are not involved in any purchasing or interest costs.
• Probably the most important benefit of a company car – you are not concerned about the depreciation costs. Other than fuel, this is the next highest cost. As you don’t own the car you don’t have to worry about this loss of depreciation at re-sale time.
• The main disadvantage to company cars is that the perks tax for a driver in the new tax year has been increased by some 30% compared to the last tax year.
What’s changed for the 2011/ 2012 tax year for a company car option?
From a 2.5% taxable value on the vehicle’s price – less VAT – it is now 3.5% on the full price of the vehicle. A logbook is essential because if the business use is 20% or less of the annual kilometres driven a full 80% of the taxable value has to be added to monthly remuneration. The tax levels for individuals have also changed slightly due to inflation ‘creep’.
If your kilometres driven for private usage is less than 20% i.e. your business kilometres is more than 80% of your total annual kilometres, only 20% of the taxable value (calculated on the 3.5%) will be added to your remuneration.
Now the car allowance option?
In South Africa the car allowance method is used by about 25% of the corporate vehicle fleet park. Many employees have opted for a car allowance over a long time – and – many have gone back to the company car option. It’s been the same with companies. It is a fact – a car allowance scheme usually costs a company some 22% more in operating costs than a company car fleet.
The main thinking about this option is that - “it is my car”. However the problem has always been that the three main criteria that relate to the tax level have not always been taken into account. The facts that have to be matched are – the actual allowance compared to the vehicle’s purchase price and operating cost, compared to the kilometres driven. If these are not in sync the PAYE due will usually be much higher than need be. This is a common situation because the actual costings are not done properly by the company.
The new tax tables have changed again with the pricing bands now increased to R60 000. For example – for vehicles priced from R360001 to R420 000 the same allowances are claimable. But there can be a big difference in operating costs between these two price levels. Basically you will also see a 10% +/- increase in your monthly PAYE.
The real problem will be the ever increasing serving and maintenance costs and the ever increasing price of fuel. Budgeting for an allowance set for the next four years can turn into a real problem for the driver.
So what is the right option for you as an individual or for your company?
There are many different company and personal circumstances – so take a look at the comparative chart. It should help you make a better decision. Make full use of the FleetCUBE calculators to help you make an informed decision.
For the driver – an allowance choice means that you are responsible for ALL costs. A company car means that you have NO responsibility for the vehicle’s costs. In these inflationary times it could be that the latter is the better option.
For the company – if you want to control costs at an acceptable level in terms of company overheads, the company car looks to be a better option.
Click here to go to the calculators and work out the best option for you or your company
Click here to view our comparative chart for Car Allowance VS Company Car
In the Essential User part of the fleet a company car tends to be the norm. In the Executive Levels of the fleet a portion of the cost to company is offered as a car allowance- if a company car is not selected. The real question is – which is the best option.
The main issues revolve around matters such as - HR policies, the latest perks tax legislation and the new increases in individual taxes, fleet operating costs, personnel management, AARTO and accident management, driver needs, a pure perk or a essential need – to name but a few
Choosing the company car option?
The company car system is a well established part of employment policies in South Africa
The advantages of taking a company car:
• The level of car choice is usually related to a grade level. This varies from company to company and the type of industry. Industry competition ensures a competitive approach by companies to maintain the right level of vehicles on a selector list.
• The company usually covers all operating costs.
• Fuel costs are usually managed through a fleet card. Certain limits can be placed on the driver in terms of private use
• Services, maintenance and repairs are usually covered. However, abuse of the vehicle could mean the driver paying for certain costs.
• You are not involved in any purchasing or interest costs.
• Probably the most important benefit of a company car – you are not concerned about the depreciation costs. Other than fuel, this is the next highest cost. As you don’t own the car you don’t have to worry about this loss of depreciation at re-sale time.
• The main disadvantage to company cars is that the perks tax for a driver in the new tax year has been increased by some 30% compared to the last tax year.
What’s changed for the 2011/ 2012 tax year for a company car option?
From a 2.5% taxable value on the vehicle’s price – less VAT – it is now 3.5% on the full price of the vehicle. A logbook is essential because if the business use is 20% or less of the annual kilometres driven a full 80% of the taxable value has to be added to monthly remuneration. The tax levels for individuals have also changed slightly due to inflation ‘creep’.
If your kilometres driven for private usage is less than 20% i.e. your business kilometres is more than 80% of your total annual kilometres, only 20% of the taxable value (calculated on the 3.5%) will be added to your remuneration.
Now the car allowance option?
In South Africa the car allowance method is used by about 25% of the corporate vehicle fleet park. Many employees have opted for a car allowance over a long time – and – many have gone back to the company car option. It’s been the same with companies. It is a fact – a car allowance scheme usually costs a company some 22% more in operating costs than a company car fleet.
The main thinking about this option is that - “it is my car”. However the problem has always been that the three main criteria that relate to the tax level have not always been taken into account. The facts that have to be matched are – the actual allowance compared to the vehicle’s purchase price and operating cost, compared to the kilometres driven. If these are not in sync the PAYE due will usually be much higher than need be. This is a common situation because the actual costings are not done properly by the company.
The new tax tables have changed again with the pricing bands now increased to R60 000. For example – for vehicles priced from R360001 to R420 000 the same allowances are claimable. But there can be a big difference in operating costs between these two price levels. Basically you will also see a 10% +/- increase in your monthly PAYE.
The real problem will be the ever increasing serving and maintenance costs and the ever increasing price of fuel. Budgeting for an allowance set for the next four years can turn into a real problem for the driver.
So what is the right option for you as an individual or for your company?
There are many different company and personal circumstances – so take a look at the comparative chart. It should help you make a better decision. Make full use of the FleetCUBE calculators to help you make an informed decision.
For the driver – an allowance choice means that you are responsible for ALL costs. A company car means that you have NO responsibility for the vehicle’s costs. In these inflationary times it could be that the latter is the better option.
For the company – if you want to control costs at an acceptable level in terms of company overheads, the company car looks to be a better option.
Click here to go to the calculators and work out the best option for you or your company
Click here to view our comparative chart for Car Allowance VS Company Car
Monday 07 February 2011
Fleet management and your budgets for 2011/ 12
Ask most companies this question – “how do you set your fleet budget?” and the answers we often get are – ‘this is related to some extent on inflation’ – ‘we can afford about 8% increase’ – ‘we have no Capex so we put the operating cost budget up by 8%’ – ‘we have added about 7% and we’ll watch the fuel price and adjust if possible’ – and in one case, even though the monthly kilometres was going up – ‘we can only give 7.5% extra for maintenance!’
What’s your opinion about these answers – not good? Well there is a better, more correct and efficient way to do this.
1. You need to have a correct current c/kms for your different vehicle groups’ e.g. executive cars, essential user cars and your LDVs. Rands are not the value to work on initially.
2. Then you need to assess the economic trends in costs for depreciation, interest, fuel and repairs that make up your c/ kms for each group of vehicles. This requires your estimate of percentage increases for each cost. No vehicle costs are likely to decrease.
3. This assessment will give you a more accurate increase for each cost area.
4. You will now be able to calculate a new projected c/kms for each group of vehicles based on their projected kilometres for the next year.
5. Then a simple comparison between the last twelve months of your fleet costs to the next twelve months will indicate you budget requirements.
6. It NEVER should be an overall simple percentage increase. If this is what you have been doing as a financial or fleet manager – to put it simply you are not being very accurate!
7. Insurance should be calculated separately as these costs are directly related to your accident ratio per vehicles in the fleet. Your loss ratio should be discussed with your insurance company to determine your next twelve months premiums and excess payments.
So now for a live example of costs projections for a fleet of 25 executive vehicles, 60 essential user vehicles and 15 LDVs. The escalations are based on FleetCUBE’s inflation assessments for each of the costs areas mentioned above for a well run fleet.
1. The 25 executive cars – current 12 month costs – R3.382m projected to cost R3.720m for the next 12 months. A 9.98% increase.
2. The 60 essential user’s cars – current 12 month costs – R4.608m projected to cost R4.860m for the next 12 months. A 10.6% increase.
3. The 15 LDVs – current 12 month costs – R1.134m projected to cost R1.255m for the next 12 months. A 10.7% increase.
4. This is a total projected fleet operating cost of R9.835m for a well run fleet operation of 100 vehicles.
5. This also assumes no increase in fleet size and the same 2500 kms a month.
If the fleet increases by only 10 vehicles and each vehicle usage went up to 2600 kms a month, this increase could be about 21%!
We can help you set more correct budgets for the next twelve months for your fleet operations. You can also try and use the Operating cost Budget calculator.
Give me a call on 011 782 9211 at the office. If I am not in, please ask for Mari and let’s see how we can help you set a detailed accurate fleet operating cost budget. You can also email me at info@fleetcube.com.
Tuesday 31 August 2010
Company cars and car allowances
The future tax situation for company cars and car allowances has been very much in the news lately. One thing is for sure – there are some major changes heading your way if you have a company car or an allowance. The changes are heading for government approval at present after a lot of discussion with the motor industry and other stake holders.
There are some real surprises coming for 2011 in the new proposals.
1. Company cars – From 2.5% on the purchase price less VAT at your marginal tax rate – to 3.5% on price plus VAT with your PAYE deduction set at 80% of this amount.
2. This will be applicable to the executive whose business usage is less than 20% of the total annual kilometers.
3. If your business kilometers exceed more than 20% of total annual kilometers – you will be able to claim the proportion of business use.
4. If you drive a lot of business kilometers e.g. a representative, and your private usage is less than 20% of total annual kilometers, your PAYE deduction will only be 20%. This will require a pre-nomination by the company or driver. Certain quite strict penalties will be applied if this tax rate is misused.
5. If a maintenance plan is included – your employer can reduce the taxable benefit (para. 1 above) by 3.25%. No mention is made of service plans.
6. A logbook will needed by ALL drivers next year.
7. Based on a R300 000 car, as an example, the new taxes will increase your PAYE from about R2 600 a month to R8 400 a month (Depending on personal circumstances)
8. Car allowances – there are no current changes but the c/km rates claimable for capital, fuel and maintenance could still be changed to increase PAYE.
9. Some general points about car allowances are given below to help you optimize your PAYE situation
1. The higher the value of the car, the more allowance can be claimed in terms of the tax table. Remember that the pricing gaps are now R40 000 apart.
2. The more kilometers driven, also results in a higher allowance claimable
3. The allowance given/ taken should “fit” the car you buy.
4. Too high an allowance results in paying more perks tax.
5. The upfront tax on 80% of the allowance is relatively high and can affect a person’s cash flow
6. If insurance is included in your allowance, it increases the perks tax you pay.
7. The financing method you use to purchase your car has no effect on your PAYE. It should be optimised. For example, build in a residual value to reduce your monthly repayments.
Give me a call on 011 7829211 if you need to discuss these matters.
There are some real surprises coming for 2011 in the new proposals.
1. Company cars – From 2.5% on the purchase price less VAT at your marginal tax rate – to 3.5% on price plus VAT with your PAYE deduction set at 80% of this amount.
2. This will be applicable to the executive whose business usage is less than 20% of the total annual kilometers.
3. If your business kilometers exceed more than 20% of total annual kilometers – you will be able to claim the proportion of business use.
4. If you drive a lot of business kilometers e.g. a representative, and your private usage is less than 20% of total annual kilometers, your PAYE deduction will only be 20%. This will require a pre-nomination by the company or driver. Certain quite strict penalties will be applied if this tax rate is misused.
5. If a maintenance plan is included – your employer can reduce the taxable benefit (para. 1 above) by 3.25%. No mention is made of service plans.
6. A logbook will needed by ALL drivers next year.
7. Based on a R300 000 car, as an example, the new taxes will increase your PAYE from about R2 600 a month to R8 400 a month (Depending on personal circumstances)
8. Car allowances – there are no current changes but the c/km rates claimable for capital, fuel and maintenance could still be changed to increase PAYE.
9. Some general points about car allowances are given below to help you optimize your PAYE situation
1. The higher the value of the car, the more allowance can be claimed in terms of the tax table. Remember that the pricing gaps are now R40 000 apart.
2. The more kilometers driven, also results in a higher allowance claimable
3. The allowance given/ taken should “fit” the car you buy.
4. Too high an allowance results in paying more perks tax.
5. The upfront tax on 80% of the allowance is relatively high and can affect a person’s cash flow
6. If insurance is included in your allowance, it increases the perks tax you pay.
7. The financing method you use to purchase your car has no effect on your PAYE. It should be optimised. For example, build in a residual value to reduce your monthly repayments.
Give me a call on 011 7829211 if you need to discuss these matters.
Thursday 22 July 2010
REPLACEMENT – WHEN IS THE BEST TIME
Tell me what you think
Replacement timing has always been a problem for the fleet owner. The constant question asked is - what is the economic life cycle for a fleet vehicle?
How would you accept the idea that kilometres driven has the highest effect on resale values and that the number of years used takes second place!! Well 33% of people recently surveyed felt that this was the case.
Some fleet owners take the view that the vehicle is used until the maintenance costs are “too high”. The problem here is the quantification of maintenance costs in terms of some standard.
Other fleet owners use the tax depreciation – on the basis that the vehicle will be written off over five years – and that is the time to change. Some base the time of use on internal driver pressures and personnel considerations. And sometimes the fleet owner will simply change at the end of the financial agreement.
It is an ongoing saga that has almost as many variations as there are fleet owners.
The continuing economic problems have had effect on fleets. The lack of capital is inhibited replacement cycles, forcing the fleet owner into a no win situation as operating costs continue to escalate. On the other hand, the need to keep a productive sales force on the road has also created pressures on company replacement policies.
Perhaps a few thoughts you can use for 2010. Some are of the opinion that it will be a low growth economic period until 2010. Others think that there will be an improvement of sorts early in 2011. Assuming a reasonable degree of growth, companies will inevitably need additional capital for growth. That could have an effect on the fleet unless financial resources are allocated for vehicle replacement. The temptation to keep old vehicles and simply absorb the maintenance costs under the operating budget is always very tempting.
This however, will create problems related to increased maintenance costs, lower resale values and poor utilisation.
The other point is that the manufacturer is being extremely cautious about extending production ahead of any economic recovery. Production has lagged behind and this will continue to impact on planned vehicle replacements. Market shortages, just when you’ve planned to change a number of vehicles, only adds to the problems of cost control.
SOUTH AFRICAN TRENDS
Over the last couple of years, replacement timing has moved out, on average by about six months. According to statistics the replacement timings most used are as follows: -
Essential Users
Period: 4 years
% of Fleets: 20%
Average KMS: 150 500
Period: 3 years
% of Fleets: 20%
Average KMS: 120 000
Middle Management
Period: 4 years
% of Fleets: 39%
Average KMS: 130 500
Executives
Period: 3 years
% of Fleets: 36%
Average KMS: 100 000
Obviously there are a number of fleet management aspects that affect these decisions. There also are the pure technical, cost, image, personnel and the operational factors.
FLEET OPERATING FACTORS
The question is, what to do and what factors need to be considered when reviewing fleet replacement policies? Here are some thoughts for your consideration:
• Know what is happening in the used car market and carefully select the most appropriate method of disposal.
• Use your own cost trends and industry trends to calculate your optimum replacement timing.
• Evaluate your decision using all the financial facts.
• Use the discounted cash flow technique to evaluate the financial implications.
• Remember the impact of “the model year”. Keeping a vehicle for another year will impact on your costs of depreciation.
• Obtain early commitments for capital expenditure.
• Look at all the financing alternatives if capital is not available. For example, leasing; rental; FML and instalment sale.
• Review fleet selection policies in view of new models on the market and the suitability of the present list.
• Try to get back to normal replacement policies as soon as possible. The incremental costs for even smaller extensions can impact heavily on maintenance costs and resale values.
• Play the end game carefully. It calls for a stop to non essential repairs and maintenance once the replacement decisions have been made.
• Review the fleet and change the high cost vehicles first.
• Don’t be tempted to keep vehicles because they look alright, or move them into the vehicle pool. Unexpected repair costs will always leave one with the thought that “I should have changed the vehicle sooner.”
• Place your orders well ahead of replacement time. Two months ahead is not too soon. It just takes a little more planning.
THE TECHNICAL APPROACH
Many theories have been developed on replacement timing. Fleetcube uses a fairly simple but very effective replacement modelling software package. It has been proved to be highly effective in assisting fleet owners to make the replacement decision. Click here to get to the replacement calculator……….
A CONCLUSION
Would you choose –
1. Use the vehicle until the maintenance costs equal the purchase price
2. Stick blindly to your set replacement policy
3. Set a maximum kilometre usage
4. Work on ‘model years’
5. Use a correct replacement software model
6. Run the vehicle until ‘the front wheels go flat’
7. Carefully watch and evaluate the used market and resale values
8. Only think about your corporate image and replace automatically
Tell me what you think
Replacement timing has always been a problem for the fleet owner. The constant question asked is - what is the economic life cycle for a fleet vehicle?
How would you accept the idea that kilometres driven has the highest effect on resale values and that the number of years used takes second place!! Well 33% of people recently surveyed felt that this was the case.
Some fleet owners take the view that the vehicle is used until the maintenance costs are “too high”. The problem here is the quantification of maintenance costs in terms of some standard.
Other fleet owners use the tax depreciation – on the basis that the vehicle will be written off over five years – and that is the time to change. Some base the time of use on internal driver pressures and personnel considerations. And sometimes the fleet owner will simply change at the end of the financial agreement.
It is an ongoing saga that has almost as many variations as there are fleet owners.
The continuing economic problems have had effect on fleets. The lack of capital is inhibited replacement cycles, forcing the fleet owner into a no win situation as operating costs continue to escalate. On the other hand, the need to keep a productive sales force on the road has also created pressures on company replacement policies.
Perhaps a few thoughts you can use for 2010. Some are of the opinion that it will be a low growth economic period until 2010. Others think that there will be an improvement of sorts early in 2011. Assuming a reasonable degree of growth, companies will inevitably need additional capital for growth. That could have an effect on the fleet unless financial resources are allocated for vehicle replacement. The temptation to keep old vehicles and simply absorb the maintenance costs under the operating budget is always very tempting.
This however, will create problems related to increased maintenance costs, lower resale values and poor utilisation.
The other point is that the manufacturer is being extremely cautious about extending production ahead of any economic recovery. Production has lagged behind and this will continue to impact on planned vehicle replacements. Market shortages, just when you’ve planned to change a number of vehicles, only adds to the problems of cost control.
SOUTH AFRICAN TRENDS
Over the last couple of years, replacement timing has moved out, on average by about six months. According to statistics the replacement timings most used are as follows: -
Essential Users
Period: 4 years
% of Fleets: 20%
Average KMS: 150 500
Period: 3 years
% of Fleets: 20%
Average KMS: 120 000
Middle Management
Period: 4 years
% of Fleets: 39%
Average KMS: 130 500
Executives
Period: 3 years
% of Fleets: 36%
Average KMS: 100 000
Obviously there are a number of fleet management aspects that affect these decisions. There also are the pure technical, cost, image, personnel and the operational factors.
FLEET OPERATING FACTORS
The question is, what to do and what factors need to be considered when reviewing fleet replacement policies? Here are some thoughts for your consideration:
• Know what is happening in the used car market and carefully select the most appropriate method of disposal.
• Use your own cost trends and industry trends to calculate your optimum replacement timing.
• Evaluate your decision using all the financial facts.
• Use the discounted cash flow technique to evaluate the financial implications.
• Remember the impact of “the model year”. Keeping a vehicle for another year will impact on your costs of depreciation.
• Obtain early commitments for capital expenditure.
• Look at all the financing alternatives if capital is not available. For example, leasing; rental; FML and instalment sale.
• Review fleet selection policies in view of new models on the market and the suitability of the present list.
• Try to get back to normal replacement policies as soon as possible. The incremental costs for even smaller extensions can impact heavily on maintenance costs and resale values.
• Play the end game carefully. It calls for a stop to non essential repairs and maintenance once the replacement decisions have been made.
• Review the fleet and change the high cost vehicles first.
• Don’t be tempted to keep vehicles because they look alright, or move them into the vehicle pool. Unexpected repair costs will always leave one with the thought that “I should have changed the vehicle sooner.”
• Place your orders well ahead of replacement time. Two months ahead is not too soon. It just takes a little more planning.
THE TECHNICAL APPROACH
Many theories have been developed on replacement timing. Fleetcube uses a fairly simple but very effective replacement modelling software package. It has been proved to be highly effective in assisting fleet owners to make the replacement decision. Click here to get to the replacement calculator……….
A CONCLUSION
Would you choose –
1. Use the vehicle until the maintenance costs equal the purchase price
2. Stick blindly to your set replacement policy
3. Set a maximum kilometre usage
4. Work on ‘model years’
5. Use a correct replacement software model
6. Run the vehicle until ‘the front wheels go flat’
7. Carefully watch and evaluate the used market and resale values
8. Only think about your corporate image and replace automatically
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