Thinking of outsourcing your fleet management? Here are 10 things to check before your sign up with a supplier.
A basic fleet management package will include the sourcing, administration and delivery of cars that your organisation will purchase and own. Additional benefits may include roadside assistance and servicing.
At its most comprehensive, a fleet leasing and management operator will provide a range of funding options: cash for car, salary sacrifice and so on, to suit the driving population of your organisation. Even if you opt for the latter, outsourcing fleet management is not a fit and forget arrangement. One member of staff at your organisation will have to proactively maintain a fleet role.
Approach outsourcing with a clear brief:
- Be sure that your fleet and drivers will benefit from expert external help. As a general rule, outsourcing will be essential for an organisation running a fleet of 400 vehicles or fewer.
- Ensure that your potential supplier has full financial backing (many of the major players are owned by banks but don’t let this lull you into a false sense of security; HSBC has just pulled out of the sector) and that it is a member of the BVLA (British Vehicle Leasing and Rental Association).
- Line up your selection criteria. Formalise what you want. At the very least a new supplier should offer direct contact with drivers so that they can make an informed choice about the car they want; driver licence checking; and accident recovery.
- Manufacturers’ own leasing arrangements. Daimler, VW, Citroen, and the other big names will clearly deliver healthy discounts on purchasing, and probably maintenance and deleasing, but will they be able to provide a complex mixture of different funding options?
- Remember that bigger is not always better. Fleet leasing and management is an area in which size often does not deliver. Manufacturers base their discounts on the end user, not the leasing operation. Some bank-owned operators might have access to cheaper funds, but they may charge more for maintenance.
- Develop a personal relationship with a potential supplier, ensure it is a good fit with your own company values.
- Go and speak to a potential supplier’s customers. “Go to Kwik Fit for example, they buy services from these companies, what are they like to do business with?” says Roddy Graham, commercial director at Leasedrive Velo and and chairman of the Institute of Car Fleet Management (ICFM).
- Look at the remarketing performance of a supplier, this will impact on the residual value of your fleet: are cars simply dumped in auction or does the supplier have a designated refleeting website? (See Zenith Provecta’s Autoquake offering.)
- Ask how a potential supplier controls cost. Its approach to maintenance will demonstrate how it controls spend. “It is not just about what the parts and labour costs are between differing lease providers, as we are all broadly buying for the same cost,” says Ben Creswick, head of business development at Zenith Provecta. “The real value is delivered by qualified maintenance technicians who scrutinise any work carried out, to ensure that the correct work is done at the right cost.”
- How does a potential supplier reward its staff? Are customer-facing staff stakeholders in the business? “Rewarding staff with share options gives them a vested interest in customer service,” says Creswick. “Not only because they don’t want to lose any customers, but because rewarding staff in this way is a powerful retention tool, so they are likely to have worked for the company for a long time which makes them more knowledgable and responsive.”