If recessions have a silver lining, it’s the fact that they force smart companies to reassess their processes and streamline operations. This is certainly true when it comes to small fleet operations, which often have tremendous potential for savings. One of the most important aspects of the small fleet procurement and disposal process is the relationship they forge with their local dealer.
Are you getting all you need out of your fleet dealer? To help answer, we spoke with a number of fleet dealers and small fleet operators. All of them feel they’re holding up their end of the bargain, and the insights they offered in to their fleet/dealer relationship should help to determine the strength of yours.
1. A Dedicated Fleet Department
Are you working with a “fleet dealer” in name only, or does the dealership truly serve the fleet market?
“You need to find out if you’re dealing with a true fleet manager or a sales manager doing a fleet manager’s role,” says Joe David Pacifico, president of Pacifico Marple Ford Lincoln outside of Philadelphia. “Fleet personnel should have business cards that say ‘Fleet Commercial Manager.’”
“We have our own dedicated sales office and sales team, so when they walk in here, the first person they talk to is a commercial salesperson. They won’t see a retail salesperson,” says Ken Thompson, fleet and commercial accounts manager for the Thompson Group at Classic Chevrolet in Grapevine, Texas.
The three domestic brands each have a network of dealers and corresponding dealer programs for small fleets. General Motors Co. (Business Central), Chrysler LLC (Dodge BusinessLink) and Ford Motor Co. (Business Preferred) have fleet-certified dealer networks and dedicated Web sites.
These dealers must adhere to a set of requirements to ensure they can serve the commercial market. All three programs require dedicated commercial sales personnel, priority servicing and a wide selection of commercial inventory in stock. The programs also offer cash back or upfit discounts on top of published fleet rebates.
Most fleet dealers are single-branded, but some operate multiple franchises. Multibrand dealer groups can offer small fleet customer many more choices for their commercial vehicle needs.
True fleet departments should have longevity and consistency of personnel, which translates to trust and longstanding relationships with fleets.
Tony Sfreddo is the owner of Triple S Services, a pest control provider based in Manassas, Va. and a loyal customer of Battlefield Ford of Manassas. “We’ve dealt with three people at the same dealership [Battlefield Ford of Manassas] for 20 years,” Sfreddo says. “I like that consistency. They seem to understand that I’m buying all these vehicles from them.”
Humphrey & Associates, an electrical and mechanical contractor based in Grapevine, Texas, has been dealing with the Thompson Group for more than 30 years. “It’s not just, ‘Here’s your Chevy and you’re out,’” says owner Randy Humphrey, “but ‘we want to be integrated in everything you do, and help you in your whole process.’”
2. Inventory: On the Ground or a Phone Call Away
Business Fleet preaches factory ordering, but small fleets often have little choice but to buy out of dealer inventory. This situation is exacerbated by the fact that there are fewer vehicles in stock as a result of the recession.
Retail-minded dealers will have pickup trucks geared toward the leisure customer. “A loaded Lariat won’t help the guy needing a basic work truck,” says Pacifico.
A good fleet dealer has a wide selection of inventory — as many as 600 units at larger stores — on the ground and upfitted with typical vocational packages. Walk the dealer’s lot and check the dealer’s Web site to get a handle on units in stock, says Thompson.
If a particular unit is not readily available, the dealer should have resources to get the right vehicle from another dealer.
“We needed two vehicles, and the two they found were at a dealer in Florida,” says Sfreddo. “Three guys drove down that night to Florida and within three days they were back with our vehicles — at no additional cost.”
For fleets smart enough to factory order, the dealer should be able to update the customer on the build and delivery status of his or her vehicles.[PAGEBREAK]
3. Transparency on Price
Small fleets should not expect factory-invoice, “triple-net” pricing reserved for large factory orders. Rather, prices based off of the vehicle’s advertised stock invoice are more common. In the bigger picture, fair and consistent pricing from the fleet dealer is the most important factor for small fleets.
“The value of the vehicle is not the purchase price,” says Humphrey. “It’s over the life of the vehicle, and the service you get after the sale.”
Nonetheless, pricing can get confusing. Small fleet buyers often have a menu of discounts and rebates to choose from. All fleets with FIN/FAN numbers can choose the fleet or retail rebate, whichever is higher. Manufacturers’ small fleet programs have further discounts, as do many industry associations.
With still other discounts on parts and service, upfits and financing, sorting through the possibilities takes some work. A good fleet dealer will know the options and routinely “do the math” to come up with the best price scenario.
“Whatever discounts are available to that customer in the particular industry he’s in, we’ll know what they are and make them available,” says Thompson. “And then we make sure they get all the rebates and money on that vehicle.”
“I’m confident I’m not missing any potential savings because of [the dealer’s] lack of knowledge of what’s out there,” says Humphrey.
Nonetheless, it is every fleet’s right to look for a better deal every once in awhile. “If we did go out and find a deal that was significantly better, we’d go back to our [primary] dealer and say ‘We found it for less, what can you do?’” says Sfreddo. “In essence, you’re keeping them honest.”
However, comparison shopping must always be balanced with maintaining goodwill with the dealer. “Even if somebody else gets close [on price], you need to weigh whether it’s worth jeopardizing the relationship,” Sfreddo says, noting that sales floor negotiations on each transaction are not part of the deal. “We just want the truck,” he says. “I don’t want to be sold all the bells and whistles. When we sign, it’s just a formality.”
True fleet dealers will have a dedicated commercial finance manager — or a fleet salesperson — handle the paperwork. They will know “how to finance a $30,000 truck with a $20,000 upfit on it,” as Thompson puts it.
In addition to financing possibilities, a good fleet dealer should offer manufacturer or independent lease finance packages specifically for fleets.
4. A Painless Transaction
Over time, that earned trust level leads to a “sign-and-go” relationship. Fleet dealers routinely deliver vehicles to the customer with the paperwork missing only a signature.
“They come to my office with the vehicle. They have the paperwork ready; all we have to do is sign,” Sfreddo says. “It’s a very smooth, painless transaction.”
“Most of the time, I’ll give the dealer an address and they’ll deliver after hours or on a weekend,” Humphrey says. “We cover 64 counties in Northeast Texas. I’ve never had anyone in the Thompson Group tell me, ‘No, we can’t get that delivered for you.’”
Fleet dealers also handle upfits of third-party equipment to deliver the vehicles in work-ready condition.
For small fleets that factory order and have out-of-state drivers, fleet dealers should be able to arrange to drop ship the vehicle to a grounding dealer in the driver’s area.
5. An Outsourced Fleet Manager
Small fleet operators who have CEO, chief cook and bottle washer responsibilities must often rely on their fleet dealer as an outsourced fleet manager.
“My dealer not only sets up the courtesy deliveries, but makes sure our vehicles are titled and licensed. My drivers only need to pick up the cars [at the grounding dealers],” says Anita Salazar, fleet and risk manager for Makita Tools USA.
This service becomes especially helpful for fleets with drivers in different states. “I deal nationwide, and each state has different requirements,” says Salazar, who works with Roy Durham Jr. of RP Automotive, a multi-franchise Penske company based in West Covina, Calif. “A dealership has to be up to speed with the new tax laws [in each state].”
Salazar deals with many dealerships for drop ships, but she is able to go through RP Automotive for one invoice. That alleviates the need to fill out W-9 tax forms for multiple dealerships.
Small fleets also use their dealer’s staff to help with spec’ing, upfitting and new-model research. Sfreddo’s dealer installed a heavier duty suspension on his new trucks to properly handle the payload. When Humphrey was ready to replace an older one-ton truck, his dealer showed him how the new half-tons could handle the same payload and get better fuel economy for less money.
Better yet, Humphrey says his dealer has given him trustworthy information on other products not sold at that dealership. [PAGEBREAK]
6. The Service Priority
Fleet dealers understand that out-of-service vehicles mean lost revenue. Thus they should bend over backward to get fleet vehicles in and out as quickly as possible. Most fleet dealers offer priority servicing for fleet customers and/or a dedicated bay, as well as appropriate replacement transportation during the repair.
For out-of-state drivers, good fleet dealers will offer factory fleet centralized billing programs for service and parts.
“Go to the fleet department and find out who the fleet service advisor is,” Thompson recommends. “Ask about extended service hours and what type of alternate transportation is available.”
7. Help on Resale
When it comes to resale, there are a few options for the small fleet that uses a fleet dealer. The first step is to get the vehicle appraised. Fleet dealers should do this regardless of whether they will take the vehicle on trade-in.
“We’ve often asked our dealer how much he’d give us for a vehicle and how much they’d sell it for,” says Sfreddo. “And then we’ve sold it ourselves.”
Thompson advises fellow small fleet customers to expect a fair market price dictated by auction values. Dealers understand that fleet customers may choose to sell the vehicle themselves. Dealers will take the vehicles as trade-ins but they generally do not run the vehicles through auction for fleet customers. Most dealers have wholesale brokers who will bid on the vehicles.
For out-of-state drivers, the fleet dealer should have a way to trade in the vehicle for a new one.
Some of the larger fleet dealers have programs set up to allow the small fleet customer to sell used vehicles directly to employees via an Internet auction.