How the Pandemic Changes Fleet Ownership — And How It Doesn’t
Fleet vehicles aren’t a given in today’s economy. Fleet sales plummeted during the worst part of the pandemic, indicating that they were an easy thing for businesses to cut. Yet this doesn’t mean that many businesses don’t need them. It just means companies need to play it smarter.
This takes a combination of modern thinking and contemporary business technology. It doesn’t necessarily mean purchasing expensive software. Much can be accomplished using computer spreadsheets and common sense.
Companies can maximize the value of their fleet by using tracking technology. Higher-mileage vehicles can be given lighter routes while lower-mileage vehicles can be shifted into longer hauls. Ideally, managers can maximize the return on their investment by selling fleet vehicles at just the right time, given warranties, repairs and related factors.
The pandemic may force us to keep our fleet longer, but we can be ready when conditions are right for resale or trade. The best car dealerships may be willing to make a deal to help improve flagging fleet sales.
Warranty and Mileage Monitoring
Many managers are purchasing new cars, vans or trucks with a plan to resell them as their warranty ends. The right technology can help you keep track of every required maintenance to maintain the warranty. Beyond that technology can help you keep up with each vehicle’s mileage.
The problem often lies with the chain of command. You should establish which team member is responsible for monitoring this information and how this information should be relayed to the appropriate manager. As vehicles start to age out, they can be put on lighter duty and newer ones moved into higher mileage routes.
GPS has made it possible for drivers to shave time off their routes by finding the fastest way or avoiding traffic. You can use technology to monitor how much fuel is used and how often deliveries are late due to traffic problems. Following the data can tell you how to improve efficiency across the board.
Today’s systems also give you the ability to monitor your employee’s driving. This is certainly encouraged by insurors. It can keep your rates down if you can prove that your employees drive safely and responsibly. If there is an accident, this information could help you prove that there was no negligence.
Constant repairs of high-mileage vehicles can sink a fleet budget. That’s why it is important to keep track of each vehicle’s maintenance and repair record. While it’s important to predict how a vehicle will do at typical mileage intervals, it’s more important to keep up with expenditures in real time.
This repair monitoring should help you refine your predictions for other vehicles. If brakes failed early for one van, it is logical to fear that they will fail early for all of the vans of the same brand and year. This should lead to a decision to start replacing this part of the fleet earlier than may have originally been projected.
Total Cost of Ownership
Before purchasing any vehicle, your team should calculate the total cost of ownership. This is based on insurance rates, fuel usage, maintenance costs, length of warranty, and depreciation. It is important to maintain these figures over the life of the vehicle. The data should help indicate exactly when owning the vehicle has become less cost effective than replacing it.
Maximizing Resale Values
If you can determine the optimal time to sell your vehicles, you will recoup more of your money. This can make a huge difference in the fleet budget. A team member could be charged with studying the resale market and watching for opportunities.
In the current climate, there is a pinch on used cars. The pandemic has caused individuals to hold onto their used cars longer. This could be an opportunity for fleet managers to unload their older vehicles into a tighter used car market.
Fleet management can be more of a science than ever before. The goal should be to use every tool at your disposal to evaluate fleet productivity and tweak it to keep costs down. The pandemic may force you to keep vehicles longer, but that shouldn’t stop you from honestly evaluating which vehicles need to be sold as soon as possible.