Serves the Commercial Small Fleet Market of 10 – 50 Vehicles

Rebates, Discounts, Incentives: What Can You Get?

November 2005, by Bert Grayson

In the July/August issue we shared advice on how to find a true fleet dealer. Now that you’re in the door, you’ll need to negotiate the deal. You are no doubt aware of the fleet and retail rebates available to you. But there are also factory incentives you may not know about that do not cost the dealer selling the vehicle any money. Don’t leave these chips on the table. Here is a list of those discounts. Some of them require negotiation on your part, and not every transaction will qualify. But the old saying applies: “You won’t get it if you don’t ask.”Get the Fleet Card FirstThe first step to realizing most of the savings mentioned here is to get a fleet card, if you haven’t done so already. It costs nothing to obtain, and the requirements are less stringent than you might’ve thought.Tip:To qualify for a Fleet Identification Number (Ford) or a Fleet Account Number (GM and DaimlerChrysler) you must have purchased, registered or leased five or more new vehicles, any make or model, in the company name within the last 12 months. You also qualify if your company currently owns or leases a fleet of 15 or more vehicles.A fleet ID number entitles you to fleet discounts and allows you to order vehicles directly from the factory. In fact, the dealer is not allowed to use a fleet number to put the vehicle in inventory.Tip:Ordering a new unit—rather than buying it off the lot—saves a significant amount of money. We can’t say this often enough.Fleet or StreetYou can take either the fleet discount or the retail rebate but not both. Go to www.fleet-central.com to look up manufacturers’ fleet rebates. Visit manufacturers’ consumer sites, or Edmunds.com, for a list of current retail incentives. Find out the retail incentive and take the greater of the two. Tip:Retail incentives can fluctuate monthly and vary by region. Fleet incentives stay constant for the model year throughout the United States.Rifleshot and Competitive Assistance Allowance“Rifleshot” money is an unpublished incentive, in addition to the fleet discount, that you negotiate individually with the automaker. How do you get your hands on rifleshot money? Contact the manufacturer’s fleet representative at the Zone or Regional level and make a point of meeting that person. He or she will want to know all about your fleet and your company’s growth plans. Larger fleets have more purchasing power to negotiate rifleshot. This one is harder for smaller fleets to get—but it doesn’t hurt to ask.However, the fleet rep will be especially interested in you if you’re considering switching brands. The factory often offers something called CAA, or Competitive Assistance Allowance, to encourage you to make the switch. This is money from the factory, so again, not a penny of dealer profit is being taken away to offer this to a qualified fleet. Tip:When your order is entered in the system your code number will trigger the discounts stored under your fleet name. This should happen automatically, but it is good business practice to check the billing to be sure that the amount of the discount is correct.Volume RebateThe volume rebate is a discount given for ordering a certain number of units all at the same time. The volume rebate is per unit and is sometimes a matter for lively debate. Again, this is more for big fleet acquisitions and volume is the name of the game.Tip:You might still be able to negotiate a volume rebate even if you don’t take all the vehicles at once. The factory may allow you to take delivery of these vehicles at staggered intervals over a few months.Component RebatesComponent rebates are given for special equipment added to the order and are almost always associated with truck purchases. Sometimes it is a negotiated item, so the actual amount is subject to change. Most often, however, these discounts are given to encourage fleet buyers to include some specific item on the order. It may take some research to find out if there are any options that qualify, but a good fleet-minded dealer should be able to help you in this regard. Tip:GM (Business Central), Ford (Business Preferred Network) and Chrysler (BusinessLink for Dodge trucks) offer programs with special discounts for truck purchases. These programs are in addition to fleet rebates. They offer choices on discounts for upfits, a gift card for tool purchases, a business card credit or straight cash back.Early Order or Fast Start MoneyHere’s another good reason to plan ahead. Manufacturers give Early Order or Fast Start money for factory orders usually placed far in advance of the beginning of the model year. These early orders allow the factory to fill the order board and obtain discounts from their suppliers. Most often these discounts are only offered on the first units to be built. Further, it is typical for the orders to be built and shipped without any delay. The cut off date to order is commonly before the end of the calendar year. For example, one manufacturer is offering early order money for the 2006 MY of $500 per unit on selected vehicles. Extended WarrantiesIt is hardly news that manufactures sell extended warranties. But did you realize that extended warranties can be negotiated as well? The dollar value of the extra miles or months varies greatly, as do the conditions. Remember that repairs and replacement items generally get more expensive as the unit racks up the miles. What is it worth to you to cover those extra 20,000 miles? Look at the repair bills on your high mileage units and do the math. If you operate a high-mileage fleet the extended warranty may be worth negotiating.Parts ProgramsParts programs are as varied as vehicle colors. These discounts are usually only available on service actually performed in the dealership, not at independent vendors. Weigh the savings carefully. See whether the program is worthwhile and then see what, if any, negotiation is possible to obtain the program that best suits your needs. If you repair your fleet vehicles in your own company-operated facility there may be savings available on parts purchased from the dealer.Tip:If you operate vehicles over a multi-state area, ask for a combined billing structure for parts purchases rather than receiving invoices from multiple dealerships.Residual Value GuaranteesWith a Residual Value Guarantee, the manufacturer is saying its unit will be worth at least as much as a “marker vehicle,” a similar vehicle of another make. This discount is more commonly found in conjunction with the Competitive Assistance Allowance (CAA) referred to earlier. Many fleets want to be sure that if they change brands they will not suffer any resale differences. This guarantee is often the reason fleets are willing to try another brand, as it removes the risk of low residual values. Ship Thru and Ship ToHave you been adding ladder racks or bin packages to your trucks using a local aftermarket supplier? Now that you’re ordering from the factory, consider having a factory-authorized installer do the work. Because the factory ships the unit directly through the installer for upfitting before it reaches you, this process is more efficient and can be less expensive. And you have the advantage of a factory warranty on the installation. Ask the fleet rep about a Ship Thru program. Ship To programs refer to upfitting larger trucks that cannot be shipped on the typical multi-vehicle trailer and therefore must be driven independently. There are savings to be had when the factory arranges for the shipping. Bert Grayson is a fleet consultant and the Fleet Sales Manager of Bennage Chevrolet in Hughes, Ark.
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