Vehicle Fleet Optimisation is a hard-to-navigate topic, but one that you need to be aware of if you run a fleet.
The business landscape has changed dramatically over the last year meaning that it is more important than ever to understand how you can optimise your fleet and get it running as efficiently as possible.
In terms of optimising a fleet, you need to evaluate and understand it first, this will allow you to compare and appreciate what changes you will benefit from. With the fleet data, you have from before the pandemic and the fleet data you have now, as restrictions are easing, you should be able to easily draw comparisons, making you fully aware of the differences allowing you to understand the changes to make.
The culture within which businesses with fleets operate is most definitely changing. You need to ensure that the changes mirror your company requirements; optimisation is something that all businesses can benefit from looking at. Once you have made this evaluation you will be able to go through the steps below and deduce which are going to be the most valuable to you and your fleet.
Early Terminations.
Handing back a vehicle early can incur recharges, and these recharges can be expensive. In some cases, it can be more beneficial to keep a vehicle for the duration of its lease but have it ‘off-road.’ To mitigate against increased costs, it is best to get any vehicle inspected before ‘hand back’ and deal with any cosmetic repairs using a SMART repair technique.
Pool Mileage.
If you have a fleet in which vehicles are often doing various journey lengths it may be worth a conversation with your lease provider as to whether pool mileage is something they can offer you. By pooling your mileage across all your vehicles you won’t incur penalties if one vehicle does slightly more miles and others do slightly less as your allowed mileage is spread across all vehicles.
Renegotiation.
If your estimated milage is lower than your contract you can contact your leasing company to renegotiate your costs based on the lower estimated milage, which may result in a reduction in monthly payments. It is important to note that due to the changed residual value, costs reduction requests can be rejected. By reviewing your policy and discovering that early termination is not an option you may need to request that your contracted miles are reduced.
Legal and Taxation Responsibilities.
Due to the drastic and unforeseen change in the business world that is a direct result of the Covid-19 pandemic, company car drivers are not using their cars in the same way. As a result of this, a lot of people are electing to operate their own vehicles for business. Using a personal vehicle for work means you are eligible to receive Approved Mileage Allowance. A prominent growing trend that can be seen is that a lot of companies are looking to migrate from company cars to grey fleets.
Damage Costs.
Damage costs are on the rise and are becoming an increasing problem. Companies must have a policy in place to follow and enforce when a vehicle gets damaged. This policy should dictate as to when drivers take ownership of the vehicle they are driving and if they are going to be held personally responsible for any damages. When handing a vehicle back to a leasing company you must ensure that all damage is evidenced and documented either by the driver, company or an independent examiner. The BVLRA Code of Conduct is an excellent resource to use when learning about returning leased vehicles and the fair ‘wear and tear’ ruling. It is highly recommended that any vehicle is fully valeted upon its return. Fees can reach over £1,000, which can often be reduced by ensuring the car is clean and devoid of damage.
Disposal.
Be aware, disposing of vehicles on mass can be very costly. It would be good to understand the market and the different mediums you can use to dispose of vehicles e.g., auctions, webuyanycar.com and Auto Trader. If you are disposing of a vehicle you need to make sure that you do not have any outstanding credit on it.
Fleet Redeployment.
Redeploying vehicles within your fleet is usually going to be the better option than an early return. It is vital to ensure that all vehicles are legal and road-worthy on return from their previous drivers and as they are redeployed. Vehicles can deteriorate a lot of wear and tear if they are parked for extended periods. It is important to ensure that they undertake a thorough inspection close to them being driven again.
Replacement Cycles, and Choice Lists.
Warranties are getting longer, it is now a popular possibility to extended warranties from manufactures as well as manufacturers offering longer warranties to start with. If you are looking to replace your vehicles on a 3-year cycle and have a low mileage fleet, then a 4–5-year cycle is a very viable option and can be very cost-effective. Another option may be to finance vehicles over a longer period, by doing this you can get more vehicles and use each less, keeping a high rotation level. This can be a good way to balance costs against use.
