Fleet management costs in 2026: What fleet managers need to know

Telematics and connected vehicle technology help fleet managers reduce costs, improve efficiency and lower total cost of ownership.

Fleet management costs include vehicle acquisition, fuel, maintenance, insurance, driver wages and software. According to ATRI's 2025 Operational Costs of Trucking Open in new window report, the average cost of operating a truck reached $2.26 per mile in 2024. When fuel is excluded, operating costs hit a record $1.779 per mile, making cost visibility a top priority for fleet managers.

Global Fleet Management Open in new window predicts that operating a fleet will continue to be expensive in the years to come. Understanding these costs and looking for ways to reduce expenses is essential to saving money and improving efficiencies across the entire fleet.

What are fleet management costs?

Fleet costs fall into two categories: total cost of ownership (TCO) and operating costs. Understanding both is essential — they affect your bottom line differently and require different management strategies.

TCO covers the full financial lifecycle of each vehicle:

• Purchase price or financing cost
• Depreciation over the vehicle's working life
• Resale or disposal value at end of life

Operating costs cover the ongoing expenses of running those vehicles day to day: fuel, maintenance, insurance, driver wages and software. Fleet management software cost is a growing line item here, as more companies adopt digital tools to monitor and control spend across both categories.

What are fixed vs. variable fleet operating costs?

Operating costs break down further into fixed and variable. Fixed costs — licenses, lease payments and base labor — stay relatively stable year over year and are easier to budget for. Variable costs fluctuate based on how vehicles are used and what happens in the field. These include:

• Collisions
• Routine maintenance and repairs
• Tolls and parking

Fuel (subject to price swings and consumption patterns) is the most volatile. Both feed into the cost-per-mile calculation below and both are where telematics delivers the most measurable savings.

How to calculate fleet cost per mile

To calculate cost per mile, divide total fleet costs by total miles driven in the same period. Total fleet costs combine TCO components and operating costs:

• TCO: asset acquisition and disposal
• Fixed costs: licensing, labor and other operational costs
• Variable costs: fuel, maintenance costs

For example, a fleet with $226,000 in annual costs driving 100,000 miles has a cost per mile of $2.26. Geotab's cost-per-mile model applies this formula across fixed costs, variable costs and driver salary, segmented by vehicle class and mileage. Fleet managers can use it to benchmark current spend and identify where adjustments will have the most impact.

What influences fleet management costs?

Fleet management costs are shaped by three main categories of expenses:

• Vehicle ownership costs include the purchase price, depreciation and financing. Whether a fleet leases or owns its vehicles directly affects how these costs are structured over time.
• Operating costs cover the day-to-day expenses of running a fleet — fuel, maintenance, repairs, insurance premiums and driver salaries. These vary based on fleet size, vehicle type and utilization rates.
• Indirect costs include technology investments such as fleet management software and telematics devices, as well as administrative overhead, licensing fees, tolls and parking.

Effective fleet management budgets aim to optimize across all three categories to minimize expenses and maximize operational efficiency.

Should fleets lease or own their vehicles?

The decision to lease or own fleet vehicles significantly impacts overall costs. Each has its pros and cons.

Fleet leasing:

• Offers predictable monthly payments
• Often includes maintenance and insurance
• Can be advantageous for businesses seeking flexibility
• Can help avoid the risk of vehicle depreciation
• May limit customization options long-term
• Potentially leads to higher overall costs, especially if mileage limits are exceeded

Owning the fleet vehicles, on the other hand:

• Provides greater control
• Has a potential for tax benefits
• Includes higher initial costs
• Is more cost-effective in the long-term
• Requires regular maintenance and repairs

What are the main operating costs for a fleet?

Operating costs are the ongoing and variable expenses associated with running a fleet. These costs can vary significantly depending on fleet size, vehicle type and operational requirements. Common operating costs include:

• Maintenance and repair costs associated with routine maintenance, such as oil changes and tire rotations, as well as significant repairs
• Insurance costs, including premiums for both vehicle and liability coverage
• Driver costs, such as salaries, wages, benefits and training expenses
• Technology costs, including fleet management software to track vehicle locations and fuel consumption and telematics device costs
• Office space and administrative costs associated with running the office space, such as utilities and administrative staff costs
• Licensing and permit fees to the government for operating commercial vehicles
• Tolls and parking fees associated with using toll roads and parking facilities

How do fuel costs affect fleet management?

Fleet management fuel costs are a significant operational expense. While there are ways to increase fuel efficiency, such as ensuring that drivers reduce idle time, fuel remains one of the largest variable costs for gasoline, diesel and alternative fuel fleets alike. Geotab's platform gives fleet managers the visibility they need to make informed decisions about managing fuel spend and reducing waste.

Transitioning to electric vehicles comes with its own set of advantages. In addition to the obvious environmental impact, choosing EVs also helps reduce operational costs and save money in the long run. Your business will save significant money on fuel and vehicle maintenance. Moreover, there are several government initiatives for businesses that are ready to transition to electric.

How do driver wages affect fleet costs?

Driver wages are a significant component of fleet operating costs. Average driver wages vary widely, depending on factors such as location, experience and the specific role. In many regions, commercial truck drivers, for example, may earn competitive wages, especially with overtime and bonuses. However, it's crucial to balance driver compensation with operational efficiency.

Fleet utilization is a key metric that measures how effectively vehicles are being used. A higher utilization rate can help offset higher driver wages. Companies can implement strategies such as optimizing routes, scheduling, and load planning to improve fleet utilization. By maximizing the time vehicles are on the road and minimizing idle time, businesses can reduce overall labor costs and increase profitability.

How does fleet management software reduce costs?

Telematics plays a direct role in reducing fleet costs and improving efficiency. Industry data supports this, finding fleets often realize ROI from telematics within the first month. As Juan Cardona, VP Sales at Geotab noted at Fleet LatAm Conference 2021: Fleet managers could see 15 to 20% savings on their costs, and invest in other safety programs.

1. Utilize fleet telematics data

Telematics is changing fleet management by providing real-time data on vehicle location, speed, idle time and more. This increased visibility enables fleet managers to optimize route planning, reduce fuel consumption and minimize downtime.

One of the most significant benefits of telematics is its ability to help reduce costs. By analyzing data on fuel consumption, maintenance expenses and driver behavior, fleet managers can identify areas for improvement and implement strategies to save money. For example, optimizing routes can reduce fuel costs while encouraging safe driving practices can lower fleet insurance premiums.

Geotab's native fuel transaction monitoring extends cost control beyond routing and driving behavior. The platform automatically flags anomalies in fuel spend, including fuel type mismatches, tank size mismatches, location mismatches and unassigned transactions where no asset or driver can be matched. Each anomaly is surfaced for investigation, giving fleet managers a clear record of where spend needs review.

Note: These features identify anomalies for investigation and are not determinative of fraud or misconduct

Fleets using Geotab's integrated fuel tools have seen a 50% reduction in fuel-related support cases, cutting the administrative overhead that comes with managing fuel spend manually.

2. Monitor driver behavior

A telematics solution provides excellent insights into driver behavior and attitude. These insights help fleet managers observe driver performance and also keep an eye out for collision data. When a vehicle collision occurs, it is important to know why and how and gather essential information for insurance and potential litigation purposes.

Reducing the premium on fleet insurance is a top priority in vehicle fleet management. One way for businesses to qualify for a premium reduction is to install a telematics device in their fleet to monitor each vehicle's trucking statistics.

A fleet tracking device can also detect harsh vehicle use, which impacts its condition over time. Harsh braking, for example, can wear down brake pads, reducing their life. By interceding with driver behavior, you can reduce bad habits that impact the life of certain parts and vehicle systems by replacing parts and providing service less frequently.

3. Schedule maintenance reminders

For a fleet, maintenance can include anything from a simple oil change or air filter replacement to a complete (Department of Transportation) DOT safety inspection. Very often, vehicles are serviced according to the three-month preventative maintenance scheduling, and then there are vehicles that are in the shop every third week. As a fleet manager, managing the predictability of vehicle maintenance helps to avoid unnecessary failures and unpredicted expenses.

By leveraging the details of telematics data, you can identify actual fleet maintenance needs and timing by picking up the actual odometer and/or engine hours off the engine, which is the most reliable source. Additionally, implementing the use of engine diagnostic reporting can help you identify maintenance patterns within certain vehicles, as well as detect and respond to problems early before they lead to costly downtime or potential safety issues.

Increase your fleet efficiency by scheduling maintenance reminders. Here's how you can do it:

https://youtu.be/SelcX002kEw?si=bVNLhnht-CRDwvO7 Open in new window

4. Decrease vehicle wear and tear

Decreasing wear and tear by reducing harsh driving improves the vehicle life cycle and the overall condition of these assets. This helps you keep disposal value high, maximizing the actual depreciation and total cost of ownership.

To increase your fleet efficiency, telematics tracking devices generate data that lets you assess your fleet's productivity and help you accurately determine when to increase or decrease your asset portfolio.

Regularly reviewing distance traveled or customer site visits per day could indicate a need to invest in business growth and/or identify unused assets. Unused vehicles are very expensive to tag, title and insure, so perhaps renting a vehicle for surge times or seasonal usage would be a better business decision.

5. Reduce idle time

An idling vehicle costs at least one gallon of fuel per hour. At an average price of $2.50 per gallon, one hour of idling per week adds up to $65 per truck per year. And most fleets are not running just one truck.

Beyond fuel, excessive idling increases engine hours unnecessarily, accelerates wear and tear and drives up maintenance frequency without adding productivity.

Fleets that actively monitor and reduce idling through telematics have cut fuel costs by up to 14% Open in new window. Integrating fleet management into your vehicles will help you monitor and report on idling, allowing you to adjust policies for when a driver should turn off the ignition, and coach drivers to save you money.

Geotab's platform helps fleet managers identify opportunities for fuel waste and emissions reduction through idling thresholds, coach driver behavior through in-cab notifications and reduce the admin time spent reconciling fuel spend through native fuel card integration.

How does telematics help control fleet management costs?

Geotab's telematics platform gives fleet managers the data they need to reduce fuel costs, extend vehicle life, improve driver safety and lower total cost of ownership.

Learn more about optimizing your fleet with Geotab.