Fleet: 25 Ford Rangers with caps.
Bug Doctor President and founder Stuart Aust soured on the dealership experience years ago. He recalls dealers trying to sell him options he didn’t need or put him in a vehicle he couldn’t use. One dealer asked him to go with a blue pickup he had in stock, and invert the blue company logo to white to keep the Bug Doctor branding — just backwards. “I got to a point going into the dealerships where I’d have to bring a few aspirin with me, because I knew of the headaches coming,” he said.
Aust surveyed members of his industry association on how they acquired fleet vehicles. Because he prefers new trucks every three years, he found leasing works best for him. The trucks are on a three-year/100,000-mile lease through a small leasing company. Aust now heads up the association’s committee for vehicle leasing and is working with leasing companies on a package for the association.
Aust installed a GPS system to keep tabs on drivers. Better routing and curtailed unauthorized use of the trucks have cut down mileage substantially, allowing him to save money with a lower mileage cap on the lease.
Aust realizes the brand-new look instills a level of pride in his workforce. And though he figures he’s paying a bit more, it makes business sense. “Some of these other companies are riding around in 15-year-old vans and you think as a customer I would never call this guy.”
Being in a service industry, Aust appreciates being serviced. If he needs a vehicle on short notice his leasing agent is “calling all over the place.” The leasing company delivers new trucks to his door with a tin of cookies and picks it up when the lease expires. “The leasing guy makes it happen, and it’s just a phone call away,” says Aust. “What’s really neat is I don’t have to go to a dealership anymore.”
Fleet: 9 3/4- & 1-ton Silverados. 11 enclosed, open and dump trailers.
Easy Turf, a field turf installer in North County, San Diego, just happens to be across the street from a Chevy dealership. Owner Dave Hartman used to be in the car business, so he knew how to negotiate hidden dealer profits like holdback. “I went into the dealership and said I just bought this growing company and here’s what I’m willing to do, are you willing to play,” says Hartman.
Hartman started with one truck but now takes advantage of fleet incentives. He takes the retail rebates when they’re higher. He’s also a member of GM’s Business Central, a no-obligation program for small businesses that offers added incentive options on every purchase, such as money toward an upfit package or a Lowe’s Gift Card.
Purchasing works best for Easy Turf, as the trucks don’t put on enough miles to warrant a lease. In fact, Hartman’s oldest truck only has 80,000 miles. His deal across the street is pretty cut-and-dry: $100 over invoice minus incentives.[PAGEBREAK]
Fleet: 18 3/4-ton Ford and Chevy pickups.
As part of the Canadian Nursery Landscape Assoc., Weed Man takes advantage of GM Canada’s competitive assistance program, a $4,500 carrot at interview time. But that assistance precludes the use of retail financing, says franchise owner Dave Hinton.
As long as GMAC isn’t offering zero percent, Hinton will use the $4,500 and take out a loan at his bank, though bank financing requires him to disclose more company information than GMAC or Ford Motor Credit.
Like Easy Turf, leasing doesn’t make sense. The short Canadian lawncare season means Hinton doesn’t put much mileage on the trucks. His first pickup, an 87, only has 100,000 miles.
Though Hinton shops local dealers on price and will contact franchisees in other provinces to see what they’re paying, he factory orders using his FIN and FAN with both GM and Ford. Each year he draws up a business plan to see how many trucks he’ll need. He orders in November for February/March delivery. “Some seasons it seems like we’re over-trucked, but when you’re in the thick of the season it seems that you never have enough,” he says.
Fleet: 10 Cube vans, 12 service vans, 15 passenger vehicles, 15 tractor-trailers
Swish Maintenance almost always leases, though its fleet is so varied it pays to analyze every acquisition option, says Mark Wilson, operations manager. The cleaning product company negotiated with GE Capital a fixed amount related to prime on a seven-year finance lease.
If the manufacturer’s incentives are particularly high, Wilson will purchase through a local dealer. He recently purchased a Chevy Tahoe, for instance, under GM’s employee pricing program. GM offered an incentive on top and gave him zero percent financing. That deal beat GE Capital’s offer. Zero percent financing was the clincher.
With a little advanced planning, Wilson negotiated a volume rebate through GE Capital. GE went to manufacturers with an order of 10 vehicles, and Chrysler stepped up and knocked an extra $600 off each vehicle. Wilson gave a verbal commitment and staggered payment and delivery throughout the year.
For the big trucks, Wilson goes through Idealease or Ryder. He’ll take an Idealease deal to Ryder to see if they can beat it.
Like Weed Man, lessors that require too much financial information from a privately held company can be an obstacle to leasing, Wilson says.
Wilson will occasionally buy a vehicle off lease and drive it for another year or two, but he won’t consider used vehicles because of maintenance issues. Being able to outsource maintenance to the leasing company is a big plus. At one time he had an employee who got used vehicles at great prices and could maintain them.
“I would pay someone $200 to $300 a month on a retainer to have that person manage part of the fleet,” Wilson says.[PAGEBREAK]
Sumter County Opportunity Inc.
Fleet: 15 vehicles: GM, Ford and Chrysler vans, sedans and pickups. Blue Bird and Thomas school buses.
Sumter County Opportunity, a federally funded Head Start program, must go through a bidding process to purchase fleet vehicles. After doing an internal request for funds, program directors draw up a spec sheet and submit bids to five different dealers, though only three bids are required. The sale must go to the dealer (regardless of manufacturer) that satisfies as much of the specs as possible at the best price, says Israel Moore. Though the program does not have a fleet number, the bidding process ensures that they pay invoice or very close. Drivers may get the options they want, but they won’t necessarily get the make.
The program keeps vehicles for between 150,000 and 200,000 miles or 10 years. Moore retains a mechanic for light repairs and sends the big problems back to the dealer.
AAA Service Plumbing
Fleet: 12 trucks, GMC C3500 chassis with Spartan service body.
Time is money, says Michael Enright, owner of AAA Service. Though he has occasionally played the price game with different dealers, Enright wants to work with someone he can trust that offers a reasonable price.
His Chevy dealer fits that bill. When he recently needed two trucks immediately, the dealer found two in Texas. The next day Enright had a purchase order in his fax machine. The trucks were delivered in two weeks instead of six weeks, the standard order-to-delivery time. “The key to my success is I’ve got my salesman’s phone number memorized,” Enright says. “I don’t waste a lot of time buying a truck.”
Enright takes a four-year note on the payments and then runs the vehicles free for a year. The trucks rack up about 120,000-130,000 miles, when maintenance becomes an issue. Any truck downtime is money not only out of his pocket but his plumbers as well.
Like Bug Doctor, newer vehicles convey the proper company image and instill pride in the workforce. “We’re real expensive, and our guys are prima donnas,” Enright says. “When we pull up to somebody’s house they can’t be looking at a rust bucket.”
The company does not have a fleet identification number.
Valley Green Lawn Care
St. Cloud, Minn.
Fleet: 11 Chevy’s. Three 1-ton flatbed trucks. Six 3/4-ton two and four-wheel drive pickups. Two cars.
Mike Hornung of Valley Green Lawn Care is in a service industry, as is his truck dealer. “I treat the dealer the way I want to be treated,” he says, echoing Aust’s philosophy at Bug Doctor. “Some companies make a dealer go into their holdback. Some people like haggling. But when I’m doing the selling, would you like me to start $250 higher so you can beat me up?”
Though he knows and trusts his local dealer, Hornung will occasionally throw an “opportunity bid” to another dealer as a price check and balance. He usually pays invoice or a couple hundred over, minus rebates. Hornung weighs the fleet incentive with the retail rebate plus financing from either GMAC or his bank. It requires a little math: The manufacturer’s financing may be better on the retail side but the rebate is generally less.
Hornung leases the high mileage vehicles and purchases the low mileage ones. He has had success with used trucks, if they’re well maintained and have low mileage. A used 3/4-ton pickup is hard to find, however. He’s only purchased gas engines to date.
Some trucks need to be upfitted. Hornung will often drive the vehicle down to the upfitter to save on delivery charges. It also gives him an opportunity to meet the fabricator and talk about any changes to the specs.
As lawncare is a seasonal business, it is critical to have the trucks upfitted for the beginning of spring. The company has recently gotten into Christmas lighting and decoration. This new year-round work opportunity means no truck should sit idle. For that reason he doesn’t purchase 1-tons anymore because he doesn’t use them in the Christmas lighting. “Everything we buy now we make sure it can be used in our lawncare and irrigation season and in our Christmas season too,” he says.