Photo via Wikimedia.
In today’s economy, fleets should always be on the lookout for cost-saving strategies.
Travis Mjolsnes, director of business development – small business and vehicle solutions for GE Capital Fleet Services offers tips for smaller fleets when it comes to acquiring vehicles.
1. Know your incentives.
The first step is to understand if you qualify for manufacturers’ national fleet incentives. If you don’t, you may still be eligible for manufacturers’ dealer-based programs, which offer rebates and other benefits such as maintenance plans and free or reduced upfit packages.
Are you a member of an industry association? Many associations have agreements with manufacturers for extra incentives. (For instance, the Associated General Contractors of America has incentive programs with General Motors, Ford and Chrysler.)
2. Work with an expert: a fleet dealer or a fleet management company.
A dealer that specializes in fleet will act as your consultant in fleet acquisitions and can guide you on available incentives.
A fleet management company (FMC) will give you similar advice, as well as help you consolidate your fleet buy to one or two OEMs to leverage better pricing. FMCs may also use their buying power to secure an additional markdown on the factory incentive, or act as your advocate with the OEM with issues such as out-of-warranty breakdowns.
3. Consider used fleet.
A fleet dealer can often locate model year-end clearances or slightly used vehicles that fit your specs. While you’d save on depreciation versus new, these one-off deals aren’t available consistently or in bulk. Check with your lender, as some don’t lease or finance vehicles more than two years old.
4. Factory order.
Buying out of dealer stock will rarely get you the right vehicle spec for your fleet needs. While factory ordering — through a fleet dealer or an FMC — takes forethought, you’ll only pay for the options you want.
When you have your models and exact specs configured, ordering from the factory is like making a photo copy — getting the same thing will keep acquisition costs and total costs in check.
5. Right spec your fleet.
Does that vehicle fit your application? While under spec’ing payload could create undue maintenance expense, in other cases, companies are switching from larger pickups to vans with lower acquisition costs that can handle the same payload while delvering better fuel economy.
6. Run a lifecycle cost analysis.
While different makes and models will fit your specs, they’ll each return different total costs and costs per mile over their life in your fleet. A lifecycle analysis considers not only acquisition costs and expected resale costs, but also financing, fees and taxes, fuel, insurance and maintenance and repairs. FMCs, fleet dealers and a little research on your part can help in this regard.
Understanding lifecycle analysis will allow a fleet to feel more comfortable with a higher acquisition cost if those costs will be recouped, and then some, in the long run.