Businesses have the option of buying or leasing fleet vehicles from their local car dealership or going through a fleet management company. But a third, and often a more viable option for small fleets, is working with a national fleet dealership.
According to Russ Cass, fleet director of Piemonte National Fleet in Chicago, “I believe that we fill the gap between the regular line car and truck dealer and the larger fleet management companies. Most dealers don’t handle fleet because they feel it isn’t worth their time or it scares them to deal with tighter margins. The big fleet management organizations usually ignore the smaller- to mid-size fleet client because they believe the smaller volume isn’t worth their time. We believe these are the customers who need our help the most.”
“Compared to local dealerships, we are experts in the fleet side of the business so we know what our customers need,” says Mike Lureau, director of fleet sales for Elmhurst Lincoln-Mercury in Elmhurst, Ill. “At most dealerships, there is a high turnover of salespeople. Our staff has been here a long time, so clients deal with the same person.”
At Pacifico Marple Ford based in Philadelphia, President Joe David Pacifico says his staff is “extremely customer relations-oriented and very hands-on, like a small, local bank.” Compared to most fleet management companies, “Pacifico Marple Ford is much smaller, so our lower overhead allows us to price competitively.”
National fleet dealers offer many niche programs to customers that some dealers aren’t knowledgeable about. “We can find the best rebate, the best financing and the best add-on services for the customer,” Pacifico says.
“We also offer a more personalized service without the extra monthly expense,” says Cass. “Most of the big guys [large fleet management companies] charge a monthly service fee per vehicle that they manage. We would never charge an additional fee after the sale. Also, our operating expenses are generally lower than the big guys. We have 15 full-time employees where I’m sure they have hundreds.”
The national fleet dealer can also handle tax, title and licensing. This especially saves time when a fleet is scattered across a few states, each with a different set of rules.
From The Factory To Your Door
At Piemonte, 95 percent of vehicles sold to national accounts are factory ordered. This is typical of most national fleet accounts.
By factory ordering you’ll get the vehicle with your exact specs, you won’t pay advertising fees that ad councils charge local dealerships, and, unlike stock purchases, your fleet incentive is applied at the time of purchase, thus reducing the capitalized cost and the amount of tax.
The national fleet dealer then “drop ships” the vehicle to a dealership near the buyer’s location, which can be many states away. The vehicle is prepped and cleaned at the dealership before being picked up by the driver.
After the vehicle is built and shipped, the drop-ship dealer physically receives the car or truck, while all of the paperwork is sent to the national fleet dealer. The national fleet dealer sends tax, title and license paperwork to the drop-ship dealer.
Dealing With The Local Dealer
Some fleets may be hesitant to pick up a car at a local dealership from which they didn’t buy the car, even though the dealership does get a fee to handle the drop ship.
“This does happen occasionally,” says Cass, “so we are very careful in trying to choose dealers who want the fleet business.” A dealership has many departments to keep busy, and each courtesy delivery involves the service department, mechanics, wash porters, office help and a salesperson to handle the actual delivery.
“In addition to getting a fee from us, the dealer usually receives credit from the manufacturer, too,” says Cass. “It’s everything a dealer would normally get except the initial sale.”
“The client may decide to purchase a personal vehicle from the dealership,” says Pacifico. “Drop-shipping also gives the local dealership an opportunity to offer service, maintenance and warranties to our clients.”
National Fleet Dealer Clientele
At Piemonte National Fleet, the majority of its fleet clients are small- to mid-size companies that may need assistance in controlling their fleet costs, says Cass. “They may not have a full-time fleet buyer who knows what special manufacturer programs may be available to them. We can usually help them find extra discounts or product availability,” he says.
Catering to all sizes of companies and types of fleets, Pacifico Marple Ford breaks down its fleet clients into three markets: commercial (local and national), daily rental operators (corporate or licensee) and government (state and local).
For the rental car industry, Pacifico Marple Ford mostly sells sedans, SUVS or mini-vans, while commercial-use clients mostly purchase mid-size sedans or light-duty trucks. For government work, the fleet dealer sells everything from sedans to work trucks.
Cass says 60 percent of his business is truck sales.
Piemonte National Fleet specializes in upfitting trucks to match its clients’ vehicle needs, so a good number of its truck sales are fitted with aftermarket truck bodies and equipment. “They tell us what they want and we supply a completed vehicle ready to go to work,” says Cass.
The three national fleet dealers we spoke with say the majority of fleet clients buy their vehicles rather than lease them. However, if the client needs to lease, the dealers can recommend available manufacturer’s lease programs. Napleton Marple Ford has a leasing division, Marple Fleet Leasing.
Many national fleet dealers are multi-franchise, offering fleet clients a much greater choice of vehicles. For instance, the Napleton Fleet Group and Napleton Luxury Cars (Oakbrook, Ill.) sell Audi, Buick, Cadillac, Chevrolet, Chrysler, Dodge, Ford, GMC, Honda, Jaguar, Jeep, Lincoln Mercury, Mazda, Mercedes, Nissan, Pontiac, Porsche, Saab and Subaru.
Perhaps the biggest obstacle national fleet dealers have to contend with is changing the mindset of many potential customers, who traditionally buy vehicles from their local dealership.
Says Lureau, “Change is always the biggest resistance—people are used to doing something a certain way. We educate the potential client on how we work, how easy the process is and how cost-efficient it is. We also will offer them referrals.
Once a potential customer becomes a client, Cass says he and his associates visit most of their existing clients around the country every year. “This involves quite a bit of travel,” he says, “but it definitely makes for better client/dealer relations. Yearly industry shows also provide us a great opportunity to visit with our clients.”
Clients eventually need to turnover their fleet, so these national fleet dealers have remarketing programs to round out the “cradle-to-grave” service.
Piemonte National Fleet has partnered with an organization that offers traditional used-vehicle disposal as well as employee sales via the Web. “In many cases,” says Cass, “the driver of a car or truck will want to buy his or her old company car for a family member or friend. He or she knows the vehicle and its service history, and can more than likely purchase the unit at a very favorable price.”
Elmhurst Lincoln-Mercury offers remarketing through wholesalers and auctions. “Company employees are also able to purchase the vehicle, and we offer them an extended warranty and financing,” says Lureau.
Recently, Pacifico Marple Ford formed a strategic alliance with Fleet Lease Disposal (FLD) that will add employee sales capability. FLD will handle and process the employee sales of the vehicle, including title and license.
A big advantage to Pacifico’s clients who choose to remarket with them is state sales tax credit, which FLD currently offers in 38 states.
Pacifico’s relationship with FLD establishes the dealership as a heavy-duty remarketer, says Pacifico, which is an advantage many other smaller fleet dealers don’t have. BF