With cost reduction and improved efficiency high on every business’s agenda for 2017, making your company’s vehicle fleet cheaper and easier to run could play a huge part in making this a reality.
We understand that things take time to get right and quick fixes are often just that – a quick fix that doesn’t offer a long term solution. However, we believe if you can adopt just one of our recommendations below, you will soon start to see the benefits.
1. Make the switch from outright purchase
2. Reduce your costs
3. Update your fleet & vehicle policies
4. Centralise your fleet management
5. Assure your stakeholders
Although the number of businesses using contract hire to fund their fleet has risen in recent years, according to a report from 2014, 37% of the UK’s largest fleet-running companies still outright purchase.
Whilst there are still some advantages to ownership, cash flow is still the main driver when it comes to switching to contract hire. By freeing up capital otherwise trapped in asset ownership, this gives companies the opportunity to invest in their core business.
Learn from other businesses like yours, such as Frimstone and Alan Bartlett and Sons, who made the move to contract hire and haven’t looked back since.
Easier said than done? Remember, costs shouldn’t be judged by the monthly rental figure alone. Often you have to look a little closer to see the true breakdown of a quote. For instance, there may be a hefty pre-loaded deposit or initial rental fee that makes the monthly figure look better than it really is.
Opted for maintenance contract hire? Check this includes tyres. Some contract hire and leasing providers don’t include tyres as standard, and a new full set of tyres, including fitting and disposal, could easily set you back £500.
Also, think about what happens at the end of the contract. Businesses can be penalised by hefty end of contract recharges for any damage that falls outside of fair wear and tear. Just think, the £10 a month you saved upfront could be undone in one by a nasty £1,000 fine at the end. Look for a contract hire provider who manages this process differently. For example, our approach is to cut out the ‘middle man’ and do all our assessing in-house. We also offer customer’s the opportunity to visit us and the vehicle on-site to help cut through any confusion or miscommunication.
What price do you put on good customer service? Like most service providers, you get what you pay for. If you’re happy the level of service you receive is reflective of the price you pay, then you’re onto a winner.
Your fleet policy should encompass all aspects when it comes to employees having access to a company vehicle. Laws and regulations are being updated all the time and these should be reflected in your fleet policy.
If you’ve not updated your fleet policy in a while, then now is the time to give it some serious thought…
The forthcoming removal of taxation privileges to salary sacrifice schemes in April could mean your employees could suddenly be paying a lot more BIK tax for their vehicle. Also, the new Vehicle Excise Duty (VED) banding is offering more taxation relief to companies who opt for ultra-low emission vehicles (ULEVs).
When it comes to fleet and vehicle policies, the answer is unfortunately not a ‘one size fits all’ approach. Each business is different and in turn, so are their requirements when it comes to company cars.
We recommend going back to the basics. Take a closer look at what the function of a company vehicle is:
- What is the purpose of this vehicle?
- How many miles do you expect that vehicle to do?
- Does it need special features?
- What’s the most efficient powertrain?
- Do you need to offer different types of vehicle for different job roles, banding etc.?
- What flexibility do you need to offer your employees when is comes to salary sacrifice or cash allowance schemes?
Also, think about availability. Certain models, engines and even colours can affect the lead time for vehicle deliveries. If you need cars to be available quickly then perhaps consider reducing the amount of factory options or speak to your provider for more information about vehicles that are ready and available now.
Above all there’s a lot of things to consider. A fleet and vehicle policy review could be a good place to start. Seek advice, speak to the experts who do this for a living and understand from them some tried and tested models.
This is both internally and externally.
As the role of Fleet Manager has developed over the years, and other departments such as Finance and HR now play a more prominent role, the ownership of vehicle fleet has become unclear.
Within your business, try to bring together all aspects of fleet management so there is one central point of control. Where this is a considerable challenge, perhaps look at outsourcing your fleet management to a specialist company.
If you are able to still effectively manage your fleet in-house, then certainly look at streamlining how many suppliers you use. Many contract hire providers nowadays also offer additional fleet support services such as short term leasing, driver licence checks, fuel cards and accident management. By having just one or two reliable third party contacts you could save yourself a lot of time and hassle.
Getting buy-in from your senior management team can be a real sticking point.
Sometimes the knowledge gap between Fleet Managers and Directors can be difficult to bridge, as each has different agendas and areas of expertise.
By investing time and effort in finding a contract hire provider that becomes a business partner rather just another supplier means you can look to them for support when engaging with key stakeholders. Usually a contract hire provider sold their services to you and made you believe that they could deliver, so get them to do the same for your senior management team.
The people behind the business can make all the difference and the team at Sandicliffe Motor Contracts are only too happy to help when it comes to making life easier for our customers. Things like visiting you at your workplace, delivering presentations and meeting key decision makers are just a few examples of how we make it our business to build meaningful working relationships that last the journey.
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