Thinking of changing your fleet supplier? Read our 10-point checklist first.
More than half of company cars are funded on contract hire with maintenance, in other words fully outsourced. But in a recent survey, 97% of HR managers said that they dealt with at least one fleet-based enquiry a day.
If you are thinking about changing your fleet management supplier, this may present an opportunity to tighten up the ownership of fleet policy within your organisation. In many companies, the traditional role of the fleet manager has virtually disappeared, with the function now performed either by an outside agency or by different stakeholders within the group.
At its simplest, ownership of the policy may lie either with personnel, who want to use it as an employee benefit and incentive, or with the purchasing group, who see it as a direct business expense and want to manage the cost.
In reality, the situation is complex and depends on other factors: company size; nature of the business; benefits offered by competitors; size of fleet; and whether the cars are bought outright or leased (because of its flexibility, contract hire is becoming more popular than purchase).
- Chances are your current arrangement was arrived at a few years ago. When was the last time you checked or benchmarked it? Are the objectives that were set then still relevant? Is it the day-to-day management of your fleet that needs a shake-up? Should you employ software that allows all stakeholders access to fleet information?
- How has the complexion of your driver population changed? How is it split between essential use (those typically driving 15,000 business miles a year, field sales for example) and status use (managers with low business miles, on a salary exceeding £50,000)? Bear in mind that for status drivers, there has been a tax and recession-driven antipathy towards cars as status symbols. In all probability the management of your organisation will have flattened to some extent in the recession and you will see a lower demand for prestige marques.
- Do you simply wish to replicate your existing arrangement with a different supplier or do you want to change the way the fleet is funded (lease, contract hire)?
- Do you want to change the way the benefit is structured (cash benefit, salary sacrifice, etc)? This will also depend on the essential vs status user split.
- How proactive is your current supplier? Have you been kept up to date with the tax and legislative changes that have changed fleet provision in the last few years and how they affect your business? Do they let you know of new, more efficient models coming onto the market?
- Are they a good cultural fit with your organisation? Some fleet companies regularly send customer-facing staff on their clients’ staff induction days, so they can get a feel for how the organisation works.
- On a day to day basis how does your current supplier perform? Are staff happy? Do drivers have access to a named contact? Is the phone answered quickly and courteously? Are vehicles delivered within agreed time slots? Is invoicing accurate? Are any reports submitted delivered on time and accurately?
- How well does your current supplier control costs? At the end of a lease do any charges for loss in vehicle value seem fair? A supplier that values your business will swallow the odd scratch.
- Are staff happy? Issue a questionnaire, either to all drivers, or to a representative group of staff and find out what improvements to your current arrangement would be valued by them.
- Can you make do and mend if possible? Holding informal conversations with alternative suppliers will give you the opportunity to shoot down your current supplier on performance, but don’t even think about costs at this stage.
Finally – beware of change for change’s sake
“Any potential supplier will beat your current scheme on price, as it’s new business,” warns independent fleet consultant Colin Tourick, “And the cost of change will be considerable.
“If you are thinking about changing your current supplier, think first about what you want a supplier to do,” he cautions. “What is currently working for you and what isn’t?
“Invite them in to get ideas about how they can change things or what else they might do for you. Meet a few of their competitors too to see what else is available in the market. If you then decide to make a change it’s worthwhile going through a formal tender process; that way you’ll be able to ask a series of questions and see how the responses compare.
“However, change always involves disruption and cost, so don’t forget to take this into account when deciding how to proceed.”