By Tim Probst, Ewald Fleet Solutions
Let us start with a few questions …
When is the last time you evaluated your fleet of company vehicles? And if you reimburse your employees for miles driven, is that the most cost-effective method?
If you cannot recall, it is time! The expenses associated to company vehicles are commonly identified as one of the top five overlooked expenses.
Lastly, how much time do your employees spend on managing your company’s vehicles?
Recall a time when your company had to acquire a vehicle and coordinate the installation of graphics and an upfitting package. To continue with this exercise, estimate the time spent on “shopping” for that vehicle (AND… include the time you surf the internet while you are not at work). Next, how much time was sacrificed for negotiating and the painstaking time at the dealership, waiting for the paperwork to be completed? After the vehicle was acquired, how much time did you or your employee spend on ordering and subsequently waiting for upfitting and graphics to be installed? Once you have the total time spent on this vehicle, monetize your employees’ time on this task. How much did this cost your company? Companies that manage their vehicle internally are often overwhelmed with this value.
A fleet management company (FMC) utilizes their automotive experiences to acquire vehicles and negotiate on behalf of their clients. Additionally, an FMC has strong relationships with automotive dealerships and vendors of graphics and up-fitting to assure the vehicle is “road ready” for your employees to use upon delivery.
Exploring a Fleet Management Company
An effective FMC uses a consultative approach with each client, independently, because one size does not fit all. Each step of a fully managed and customized fleet program is critical to controlling the total cost of ownership (TCO) of each vehicle.
A FMC controls the TCO through multiple steps of a clearly defined program:
- Identifying the correct vehicle(s) for your team
The first step is selecting the correct vehicle(s) based upon the client’s needs and usage. Are some of your employees in vehicles that do not fit their needs? That was a common theme, post COVID pandemic. Allowing a professional fleet manager to make vehicle recommendations will save your company money by considering the effectiveness of each vehicle as well as fuel efficiency, projected resale value and other factors.
- Developing a life cycle strategy
Developing the appropriate life cycle strategy, based on the assigned drivers estimated annual mileage is the next step of a well-managed fleet program. Mileage and the vehicle’s age are the building blocks for determining a life cycle. Such a plan remarkets older and less efficient vehicles, removing the vehicle prior to incurring expensive repairs. Disposal of vehicles is time consuming, expensive, and lacks the application of automotive expertise if done internally.
A newer fleet decreases downtime; improves company image; boosts employee morale; provides employees with updated vehicle safety advancements; and saves money on fuel and maintenance expenses.
- Strategic vehicle acquisition
Strategic vehicle acquisition is accomplished in one of two ways. The first method is acquisition through dealer inventory. This fills the immediate need, but the vehicle may be over equipped for your needs which brings additional costs to you for features not needed. The pricing is also fixed by the selling dealership. For vehicle needs out of state, FMCs develop partnerships with dealerships across the United States to assist with any vehicle need regardless of the client’s location. However, the most cost-effective acquisition strategy is ordering out vehicles. This limits excessive vehicle features as the vehicle can be built as desired. This strategy also takes advantage of potential fleet incentives and volume discounts for additional cost savings. With this option, vehicles can be delivered to any drop ship dealership in the United States, upon vehicle production completion.
- Managing fuel expenses
With a well-crafted fleet program, employees utilize a fuel card, which is widely accepted at gas stations throughout the country. A fuel program minimizes wasted fuel and employee downtime in search of their favorite fueling station. Fraud is also minimized as the fuel card is limited to fuel pump usage. Other notifications can also be added to alert employers of excessive purchases or unusual fuel consumption.
- Accessing a maintenance management platform
Access to a maintenance management platform is another important element of fleet management. National account pricing is available to companies that enter a maintenance program, providing access to repair facilities throughout the country. Different authorization levels are implemented to control expenses. Consultation from an ASE Certified Technician is also available as they advocate on behalf of your company and are incentivized if they forgo unnecessary repairs to your vehicle.
Fuel and maintenance expenditures are captured on a monthly itemized statement, which provides transparency to the total cost of ownership of each vehicle. Both programs also collect current mileage of each vehicle, providing data for planned vehicle replacement.
- Turn-key solution for up-fitting and graphics
A fully managed fleet program coordinates the installation of graphics and vehicle up-fitting in a timely manner, prior to delivery, and rolls these expenditures into your monthly lease payment.
- Ancillary Services
Additional support is available for towing, glass repair, rental vehicles, safety training, personal mileage reporting, telematics, management services for collisions, tolls, and licensing.
Fleet management companies save businesses time and money, and provide ongoing care to ensure fleets are reliable and scaled appropriately for each contractor’s unique needs.
Ewald Fleet Solutions is a Waukesha-based fleet management company and proud member of ABC. Our team partners with companies across the United States to reduce costs, make smart decisions, and drive businesses forward. Visit us at https://www.ewaldfleetsolutions.com/.
