How to manage fuel costs to reduce your total cost of ownership

Fuel costs consume a large share of virtually every fleet budget. What can be done about this? Plenty. Here are some actionable steps to reduce fleet fuel costs and your overall operating costs.

What you’ll learn:

• The impact of driver behavior on fuel efficiency
• How maintenance best practices reduce fuel costs and TCO
• The measurable contributions of fuel cards
• How telematics can reduce fuel spend
• How strategic vehicle acquisition can lower fuel costs and TCO

Ask most any fleet manager to name their biggest operational headaches, and fuel costs are all but certain to be among them. It’s no surprise, really. Fuel is one of the largest line items in any fleet budget. And unlike labor or insurance, it’s a cost that can swing dramatically up or down based on market forces, seasons, and drivers' day-to-day behavior.

While you can’t control what happens at the refinery, in geopolitics, or on Wall Street, fleet managers have far more influence over their fuel spend than one might initially believe. How? By pairing smart operational habits with the right technology, fuel savings compound quickly. You (and your CFO) will be most pleased.

We sat down with Christina Hartzler, a former fleet manager and the Director of Client Partnerships at Mike Albert, to talk about how fleets can reduce the pain at the pump. Here’s a summary of her observations and recommendations.

The moving target that can wreak havoc on fleet budgets

Fuel prices are never truly stable (if only!), but there’s a reliable seasonal pattern that every fleet manager should know about: prices tend to rise in spring and peak in late summer, year over year.

According to the U.S. Energy Information Administration (EIA), this is driven by two consistent forces. First, the federally mandated switch to smog-reducing, summer-blend gas, which is more expensive to refine. Second, demand surges every summer as the vacation driving season kicks in.

For fleet operators, that annual summer price bump isn’t just a background detail; it’s an unpleasant budget reality. “However, the fleets that feel this annual rise the least are those that have already built strong fuel-efficiency practices into their operations year-round,” says Hartzler.

Driver behavior: Your biggest variable

How your drivers operate their vehicles has an enormous effect on fleet fuel efficiency. According to Mike Albert partner Geotab, behaviors such as speeding, harsh braking, and excessive idling can increase fuel consumption by up to 30%. That’s right, 30%! Here are some specifics worth knowing:

• Speeding: According to the U.S. Department of Energy, every 5 mph driven over 60 mph can cut fuel economy by roughly 7%, which is the equivalent of paying about 20 to 27 cents more per gallon. Most cars and light trucks reach their peak fuel efficiency between 40 and 55 mph, with efficiency dropping off sharply above that.
• Hard acceleration: Every time a driver puts the “pedal to the metal,” the engine burns fuel inefficiently. Smooth, gradual acceleration makes a meaningful difference over the course of a day.
• Coasting and momentum: Encouraging drivers to maintain an ample following distance so they can slow gradually rather than brake suddenly conserves fuel (and brake pads).

This is why a driver coaching program can yield rapid, substantial returns. Successful coaching programs are based on clear expectations and regular feedback. Another key element is positive reinforcement (think not only of praise but gift cards or other tangible rewards) for drivers who hit efficiency benchmarks. “Such programs can even create a friendly competition among your drivers to see who can achieve the best fuel efficiency and safety score,” notes Hartzler.

The idling problem: Small habits, big impact

Idling is one of the most overlooked fuel drains in fleet operations, despite being one of the most correctable. An idling engine can burn between a quarter and a half gallon of fuel per hour, depending on engine size and accessory use, while generating zero productive miles.

“Think about how idling adds up across your fleet: drivers warming up vehicles on cool mornings, sitting at job sites with the engine running, waiting in fast-food drive-throughs, or keeping the A/C running during breaks,” says Hartzler. “If a driver idles, say, 45 minutes a day, that can add up to hundreds of gallons of wasted fuel per vehicle, per year.” Ouch.

Here are some of Hartzler’s practical steps for reducing idling:

• Set a clear idle policy. Define the maximum acceptable idle time (many fleets use a two- to five-minute threshold) and communicate it to every driver, reinforcing the message often.
• Turn off the engine during extended stops. Despite belief to the contrary, it takes only a few seconds’ worth of fuel to restart a vehicle.
• Use auxiliary power units (APUs) for heating and cooling in vans and light trucks instead of idling the main engine.
• Use telematics to monitor idle time by vehicle and by driver. Identify the worst offenders and coach them directly. (More on this below.)

Proper maintenance is a major fuel saver

A poorly maintained vehicle is fuel-inefficient. Dirty air filters, worn spark plugs, degraded engine oil, and underinflated tires all force the engine to work harder than it needs to, increasing your fleet’s operating costs. These elements should be checked regularly. Plus, engine warning lights should be addressed promptly. A faulty oxygen sensor, for example, can significantly reduce fuel economy.

Tire inflation is worth highlighting. The U.S. Department of Energy estimates that for every one PSI drop in tire pressure, fuel economy decreases by about 0.2%. That may seem small, but it adds up quickly across a fleet that covers thousands of miles a week. A simple pre-trip tire check is one of the easiest, cheapest fuel-saving habits a driver can develop. (Tires should be checked cold, prior to the day’s first trip.)

The financial benefits of fuel cards

Achieving optimal fuel efficiency depends not only on vehicle selection, maintenance, and driver behavior; it also requires robust monitoring, data visibility, and control mechanisms. This is why a comprehensive approach to fuel management includes integrating fuel card programs, such as those from our partner WEX, which provide advanced tools to track and optimize fuel-related expenditures.

“These programs enable fleets to monitor fuel usage at a granular level, offering real-time insights into consumption patterns across vehicles and drivers,” says Hartzler. Fuel cards also play a critical role in reducing waste and preventing fraud. Features such as transaction-level controls and alerts help identify suspicious activities, including unauthorized or fraudulent fill-ups, excessive fueling frequency, and the use of premium fuel where it is not required. By enforcing policy compliance and flagging anomalies, organizations can significantly reduce unnecessary costs.

“In addition to cost control, fuel card programs often offer rebates and discounts, allowing companies to further reduce their effective fuel spend,” says Hartzler. “These financial incentives directly improve TCO and enhance overall fleet cost efficiency.” For Fleet Management Companies (FMCs), integrating fuel card data is particularly valuable. It enables centralized oversight of fuel utilization, supports accurate cost tracking, and enhances reporting capabilities. By leveraging this data, FMCs can deliver actionable insights to clients, optimize fleet performance, and support strategic decision-making.

Telematics: Turning data into saved dollars

If there’s one technology investment that consistently delivers a strong return on investment in fleet management, it’s telematics. And its impact on fuel efficiency and TCO is one of the primary reasons why.

Telematics systems combine GPS tracking with onboard diagnostics to give fleet managers real-time visibility into what’s happening across their entire fleet. The U.S. Department of Energy reports that real-time driver feedback and behavior monitoring through telematics, which address habits such as speeding, idling, and harsh braking, can reduce fuel use by 10 to 25%. Much of that gain comes from surfacing behaviors that were previously invisible to fleet managers.

Here’s some of what Hartzler says that modern telematics can do for fuel efficiency and TCO:

• Idle time monitoring: Telematics flags vehicles that exceed your idle threshold, creates driver-level reports, and can trigger real-time alerts. Awareness alone tends to drive behavior change.
• Driver behavior scoring: Acceleration patterns, braking, cornering, and speed are all tracked and compiled into driver scorecards. Managers can coach the outliers and reward the top performers, creating a culture of safety and accountability.
• Route optimization: The most fuel-efficient route isn’t always the most obvious one. Telematics platforms with routing capabilities account for traffic, stop patterns, and distance to help drivers get where they’re going with less fuel burned.
• Maintenance alerts: Telematics tracks mileage and engine diagnostics, automating maintenance reminders before small issues become expensive repairs. A well-maintained vehicle is more fuel-efficient.
• Fuel card integration: Pairing fuel card data with telematics allows managers to cross-reference purchases with location and vehicle data. This helps identify waste, misuse, and discrepancies.

Thinking beyond the gas pump: Total cost of ownership

Fuel efficiency is a major driver of total cost of ownership, but TCO is, of course, a bigger picture. TCO captures the full cost of operating a vehicle from acquisition through disposal, including:

• Purchase price or lease cost
• Fuel
• Insurance
• Maintenance and repairs
• Downtime costs (the revenue or productivity lost when a vehicle is out of service)
• Residual or resale value

“The vehicles that look well-priced at acquisition don’t always come out ahead when you run the full numbers, “says Hartzler. “A vehicle with better fuel economy, lower maintenance costs, and higher resale value may cost more upfront but deliver a meaningfully lower TCO over a three- to five-year lifecycle.”

That’s why right-sizing matters. Matching the vehicle to the mission (not over-specifying a heavy-duty truck for a job a lighter van could handle, and vice versa, overloading a lighter-duty vehicle) keeps fuel and operating costs in line. And when vehicles are replaced at the right time in their lifecycle (before maintenance costs spike), the fleet runs more efficiently.

The smartest fleet decisions aren’t just about what a vehicle costs today; they’re about understanding what that vehicle is going to cost you over its entire life in your fleet, including fuel, maintenance, downtime, and all the rest. When you look at it that way, the case for investing in efficiency becomes very clear.

Start saving before prices climb (again)

You don’t have to wait for fuel prices to hit a seasonal peak to start acting. The most resilient fleets build fuel efficiency and TCO discipline into their operations year-round, so when prices inevitably rise, they’re already ahead of the curve.

A few places to start:

• Audit your current idle time data — if you don’t have it, that alone is a reason to look at telematics
• Establish a driver fuel efficiency policy and share it with your team
• Add tire pressure and fluid checks to your standard pre-trip inspection process
• Review your fleet’s vehicle-to-mission fit and flag any mismatches
• Talk to your fleet management partner about a lifecycle cost analysis for your current and upcoming vehicle acquisitions

At Mike Albert Fleet Solutions, we help fleet managers take a more strategic approach to fuel management and total cost of ownership. So, contact us today. We’re eager to discuss how your fleet can get more from every gallon.