Seven vehicle expenses you may not have accounted for
April 5, 2022
Whether your business maintains a single vehicle or a large fleet, unexpected running costs can hit your wallet hard over the course of a financial year.
To minimise the impact, it’s a good idea when budgeting to identify as many specific costs as possible, rather than simply creating a catch-all ‘running costs’ line.
Being specific not only allows you to more accurately estimate your total vehicle-related spend but also can help you identify points in time - whether it’s a particular season, month or even time of day - when costs might be higher.
And, with your running costs separated out, you can methodically look for savings, item by item.
Here are seven vehicle-related expenses that should be on every business budget.
Paid parking is one of those expenses that is very often overlooked and can throw your weekly budget out again and again. If you’re reimbursing employees for parking they’ve paid for up front, there’s also a time lag to be aware of. For peace of mind, consider ring-fencing funds for parking. It’s also worth discussing parking fees with your accountant to make sure you’re claiming all possible deductions. And thanks to technology, gone are the days of losing money on unused parking time. In Auckland, there’s the AT Park app from Auckland Transport, and in both Wellington and Christchurch (and 13 other regional councils across New Zealand) you can use PayMyPark. With AT Park, you can ‘stop’ parking - and importantly stop paying - if you finish before the time allocation you originally set. PayMyPark has a pre-pay feature, which is helpful if you want to attach a weekly, monthly or annual allowance to your parking expenses. Both apps send automatic e-receipts to your email address.
Insurance premiums aren’t easily forgotten, but what can be overlooked when budgeting are one-off costs (e.g. claim excesses) and price changes as your circumstances evolve. Try to plan ahead as much as possible, even if that means assuming the worst and factoring in a prang or two over the course of the year.
3. Car washes
Rather than cleaning your fleet ad hoc, decide on the frequency at the start of the year and budget accordingly. If you’re a logistics company, or your team drives regularly to client meetings, car cleaning is an expense you shouldn’t skimp on. Luckily, many car washes run loyalty programs that bring down the price for regular customers, so you may find that planning out a year’s washing saves you money. If you use the Z App you can receive a digital stamp for every purchase with your 5th Z2O Car Wash for free.
4. Fuel card account fees
Fuel cards can be nifty budgeting tools because they provide real-time visibility over the expenses your team is accumulating while offering businesses incentives and savings. But fuel-card account fees can sting, particularly if you aren’t expecting them. The solution? Seek out a fuel-card scheme that doesn’t charge fees at all, such as our Z Business Plus fuel card.
5. Vehicle registrations
Renewing your vehicle registration for a longer period of time will save you a great deal of cash in the long run. Opting to renew for a whole year, for example, will always work out cheaper than renewing in two batches of six months. If you have more than one vehicle, and especially if you manage a fleet or multiple fleets, this can add to some serious savings over time. What’s more, the ACC levy (which is priced into the registration fee) is due to drop on July 1 2022. Depending on your type of vehicle, the reduction will be anywhere between $40 and $170. So if your vehicle is up for renewal, or will be soon, renew your registration to end in July so that you can make maximum use of the drop in fees going forward.
Many of us rely on our local garage to remind us when our Warrant of Fitness (WoF) inspection is due, but doing so makes it easy to get caught out by the costs involved. As well as making sure WoF fees are included in your budget, think about whether you might want additional servicing or inspections during the year to keep your fleet running at optimum levels.
7. Accounting and bookkeeping
Looking forensically at your vehicle expenses – and, as a result, claiming more back at tax time – may involve extra billable hours with your accountant. Training your team to keep more detailed records about their vehicle usage might also involve the odd after-hours training session. However, this is a budget line that will quickly pay for itself in savings.