For many companies, their vehicle fleet is one of the largest cost items, yet few know exactly what it really costs. Smartfleet prepared a total cost of ownership calculation, or TCO, for its long-term customer Tapiolan Lämpö. With it, the customer was able to see the true costs, a significant share of which only materialises when the fleet is realised. This cost impact is not taken into account in procurement tenders.

“The annual savings are significant. Over a five-year review period, we are talking about total savings of hundreds of thousands of euros, based on factors such as fuel consumption as well as service and repair costs,” says Karel Nieminen, CEO of Tapiolan Lämpö Group.

However, a significant share of fleet costs only arises at the end of the lifecycle, and these costs are related, for example, to vehicle returns, excess mileage and resale value. That is why understanding total costs requires a TCO review, which not all service providers disclose from the customer’s perspective in sufficient detail.

What do vehicles say about a company?
Tapiolan Lämpö’s fleet has been managed with Smartfleet since 2021. During this time, according to Karel Nieminen, the company has gone through a cultural transformation. Previously, the company owned its vehicles itself, and they were serviced at the group’s own workshop. Even so, the company only gained full transparency into its fleet costs after choosing Smartfleet’s solution from all the options on the table.

“Before this, we did not have a proper overall view of our fleet costs, but now we know what each item costs and can forecast expenses much more accurately,” Nieminen says.

“At the same time, clean and well-maintained vans have effectively become our brand ambassadors, with their use guided by clear processes and metrics,” he continues.

Tapiolan Lämpö is also committed to reducing its CO2 emissions. Achieving this goal is also easier when the fleet management system helps calculate and reduce emissions.

How much does one van really cost?
Tapiolan Lämpö’s fleet includes approximately 160 vans. According to Smartfleet’s TCO calculation, one Toyota Proace of this kind costs slightly over €20,000 over a lifecycle of 36 months and 60,000 kilometres. The differences between financing solutions are significant.

“For many reasons, we originally chose finance leasing, and Smartfleet’s calculation shows that it was the right choice for us. This was also assessed through return on invested capital, which is something that is easily left out of the calculation,” Karel Nieminen states.

Tapiolan Lämpö has also tested electric vans, and in the TCO calculation they appear, in euro terms, to be even a slightly more cost-effective option. According to Karel Nieminen, however, there are still question marks around operational reliability. Decisions can now nevertheless be made with the support of fully transparent data.

“The fleet is a critical part of our business. Vehicle reliability has improved significantly, and the fleet no longer causes disruptions to service delivery,” Karel Nieminen explains.