How to spot fleet problems: warning signs and a checklist

Every business owner knows that the company car fleet is an important part of day-to-day operations, affecting both operational efficiency and costs. Nevertheless, not every owner, CEO, board member or person responsible for the company's overall budget has full control over the fleet and how it is managed. It is precisely from the perspective of such a person, observing processes at a higher level of reporting, that it is easier to spot the first symptoms indicating that something is going wrong with the fleet.

In this article we look at the most important warning signs that should worry every business owner or decision-maker and prompt them to take appropriate action before the situation gets out of hand and negatively affects the company's finances and image.

To better understand cause and effect, we will single out a few key areas in which anomalies may occur that point to approaching problems with the vehicle fleet.

These areas may be:

• Fleet management in relation to the rules in force in the company, as described in the fleet policy.
• Internal communication in the company around fleet topics.
• Staff turnover and problems finding new people.
• Worrying information coming from contractors serving the fleet (e.g. leasing or car rental companies, fuel suppliers, repair networks, insurance brokers or state institutions).

Fleet management: warning signs

• Missing signatures on “company vehicle handover and return reports”.
• No photo documentation of the vehicle's condition at handover.
• Vehicles handed over in a way inconsistent with the agreed locations or without the designated fleet administrator present.
• Company cars handed over in poor technical condition, without the required documents (e.g. registration certificate, valid third-party insurance) or without the full set of accessories (e.g. fire extinguisher, warning triangle).
• No systematic checks of technical condition, and in particular no timely inspections and repairs at authorised workshops.
• Failure to follow the criteria for assigning vehicles to specific positions, which may manifest itself as a poor match between the car and the needs of the role, or unagreed additional costs for recruitment not included in the annual headcount plan.
• Encouraging or forcing employees to use the company car for private purposes without the line manager's proper consent or without adding the appropriate amount to the employee's income in line with tax regulations.
• Failure to follow the procedures for making vehicles available to third parties, including use by unauthorised persons (without a valid driving licence or experience).

Example: An employee returns a damaged vehicle, and the company cannot prove what condition it was in when they received it.

Internal communication: warning signs

• Insufficient information to employees about changes or rules arising from the regulations, e.g. the procedures for reporting damage or changes in the vehicle's technical condition.
• No corrective action or sanctions against employees when culpable damage or other breaches are found, which may indicate that the established procedures are not being applied properly.
• Favouring departments or employees in the choice of cars, e.g. with higher specifications.
• Conflicting information about an upcoming fleet replacement.
• An inconsistent approach to settling private journeys, claims or other provisions of the fleet policy.

Example: Employees do not know how to report damage, which results in it being concealed and no appropriate corrective action being taken.

High turnover among employees using company cars: warning signs

• Information from the HR department indicating that fleet management operates contrary to the principles and values the company espouses.
• Critical comments on social media about the fleet.
• Open court disputes with employees in which issues relating to company car management have come up.
• Comments from newly recruited employees about the fleet that they heard from former employees.

Example: New employees resign after a few months because they heard from former colleagues about problems with vehicle allocation.

Worrying information from contractors: warning signs

• High excess charges generated by drivers, particularly on long-term rental contracts.
• Frequent offences reported by the competent state institutions to vehicle owners (the leasing companies).
• A high claims rate compared with previous premium periods.
• A growing share of “car park” damage with no identified culprit.

Example: The leasing company charges additional fees for excess mileage, which results from a lack of monitoring of vehicle use.

Other worrying signs of fleet management problems

1. Breaches of road safety rules

• Insufficient safe driving training despite mandatory attendance, or failure to enforce the requirement that employees hold valid driving entitlements.
• Not requiring employees to report loss of entitlements or documents, or health conditions affecting their ability to drive.

Example: An employee loses their driving licence, but the company has no procedure for verifying entitlements and continues to assign them a car.

2. Improper use of monitoring systems (telematics/GPS)

• No collection or sharing of data on location, mileage, driving style or the vehicle's technical condition, even though the system is intended for fleet control.
• Reports or information from the telematics system not being passed on to the fleet administrator.

Example: Employees use company cars for private purposes, generating unjustified fuel costs.

3. Incorrect cost settlement and a lack of transparency in who pays

• Mixing up the rules on vehicle running costs, e.g. the company does not separate the running costs borne by it and by the employee in line with the regulations.
• Failure to comply with the rules on fuel card use, such as sharing them with third parties or using them for purposes other than intended.

Example: The company does not monitor fuel consumption, and employees fill up private cars with company fuel cards.

4. Improper handling of emergencies

• The company does not implement or enforce procedures for handling collisions or accidents, e.g. no guidelines on securing the scene, giving first aid or notifying the relevant services (police, ambulance, fire brigade) and internal structures (line manager and fleet administrator).
• Lack of the required incident documentation, e.g. not collecting or storing completed “collision statements”, sketches of the situation or photos of the damage, which are crucial for subsequent analysis of the incident.
• Inadequate procedures for reporting theft or vandalism, e.g. no immediate notification of the police and no action taken to secure the property.

Example: An employee fails to report a minor collision, which results in a claim being refused for more serious damage.

5. Improper procedures for withdrawing the right to use a vehicle

• The company does not apply the established criteria for withdrawing an employee's right to use a company car, for example no clear communication or decision in cases of loss of entitlements, long-term absence or a high rate of damage caused by the employee.
• No timely settlement of the vehicle's technical condition on return, or failure to follow the rules set for assessing the vehicle's condition (e.g. comparison with its condition at handover).

Example: An employee with a history of numerous damage cases continues to receive a car without additional conditions of use.

6. Breaches of the rules on replacing worn tyres

• The company does not inform employees about the start of servicing campaigns or tyre changes, which may result in the vehicle being in an inadequate technical condition.
• Failure to comply with the set tyre wear criteria, such as minimum tread depths, which may indicate a lack of care for the safe operation of the vehicle.

Example: Employees drive on tyres below the minimum tread depth, which increases the risk of skidding.

7. Improper procedures for buying out a company car

• The company does not comply with the set deadlines and rules for vehicle buy-outs, for example no clear information about the buy-out option, missed deadlines for submitting declarations or a lack of transparency in setting the vehicle's market price.
• The offer and communication process regarding the buy-out is not carried out in line with the established procedures, which may indicate non-compliance with the regulations.

Example: Employees do not have equal access to information about the buy-out option, which breeds conflict.

With such a broad catalogue of undesirable phenomena that are potential causes of a malfunctioning fleet department, it is worth using good practices that make it easier for managers to check the state of the company's fleet at any time.

A checklist containing all the questions that concern us can serve this purpose. We can draw up such a checklist ourselves, but using AI tools (e.g. ChatGPT) seems just as good, and perhaps even more effective and less time-consuming.

Here is an example 20-point checklist of questions to verify whether something is going wrong with the fleet:

1. Does the company have up-to-date procedures for handing over and returning vehicles?
2. Do employees know how to report damage and other problems related to vehicle use?
3. Is turnover among employees using company vehicles higher than in other departments of the company?
4. Are leasing, insurance and servicing costs rising in an unjustified way?
5. Does the company effectively monitor drivers' compliance with road safety rules?
6. Is the telematics (GPS) system used to check actual vehicle use?
7. Are fuel expenses and other running costs transparent and controlled?
8. Are there clear procedures for accidents, breakdowns or vehicle theft?
9. Does the company have a policy for withdrawing vehicles from employees who breach the rules of use?
10. Is the technical condition of vehicles, including tyre wear, checked regularly and compliant with the regulations?
11. Is the fleet optimally matched to the company's real needs, or are there unused vehicles?
12. Does the company have a system for monitoring vehicle mileage, and are limits controlled?
13. Does the company have a defined policy on the use of vehicles for private purposes?
14. Are cases of unjustified repairs and parts replacement in company vehicles recorded?
15. Do employees comply with the established refuelling policy, and are fuel consumption analyses carried out?
16. Are leasing and servicing contracts regularly reviewed for cost-effectiveness?
17. Has the number of fines and traffic offences by fleet drivers increased recently?
18. Does the company have procedures for verifying drivers' entitlements, and are they followed?
19. Are cases of improper vehicle use by employees reported?
20. Does the company analyse the potential for savings in fleet management, e.g. by changing service providers?

Remember the iron rule of auditing, which says that for every issue we verify there must be evidence available (preferably in the form of specific documents or system data).

With a periodic fleet audit carried out this way, we can use it as a basis for defining specific corrective and preventive actions to neutralise potential risks in advance. I also recommend applying the idea of continuous improvement in this area and setting the fleet manager one of their periodic (e.g. quarterly) targets based on maintaining, say, at least 75% positive answers in the audit.

Summary

This article presents the key warning signs that may indicate problems in fleet management. I have pointed out both organisational and operational aspects that affect the fleet's costs, safety and efficiency. Of the issues raised, the three most important pieces of advice are:

1. Implement effective procedures for vehicle use and return: a lack of clear rules leads to chaos, concealed damage and an uncontrolled rise in costs. Developing and enforcing procedures keeps things in order and minimises financial risk.
2. Monitor costs and vehicle use: incorrect fuel settlement, excessive vehicle wear or a lack of control over leasing can generate huge, unjustified expenses. Regular analysis and the use of telematics systems help optimise costs effectively.
3. Enforce safety rules and driver accountability: a lack of oversight of vehicles' technical condition, improper post-accident procedures and failure to enforce penalties for breaches can lead to serious legal and financial consequences. A good fleet policy should emphasise safety and user accountability.

In my next article we will discuss 5 non-obvious places where the fleet can save the company money. It is worth knowing where costs can be cut without affecting efficiency!