Fleet News

Fleet200 Round Table: CCIA June 2013 - Procurement

Topic: Vehicle procurement options: how do you decide which cars and vans to choose for the business. What are your priorities? What role do wholelife costs play? How much consideration is given to aftersales – maintenance and quality of dealer network?

Wholelife cost (WLC) is the primary cost focus when selecting cars and vans for the fleet. It is used to influence the grading structure for cars, rather than the purchase cost or leasing cost of the car.

However, for vans safety considerations can outweigh WLC. It can be the filtering process to create a shortlist, then minimum specification is added and then the WLC is taken into consideration.

Control of maintenance and aftersales costs are key within WLC. Relationships with suppliers are important to ensure you are their highest priority – the impact on downtime “can be massive”, according to one fleet.

“It’s not always the discount you get up front; it’s about downtime and parts availability. The amount of time a van is off the road can turn into a lot of money and it varies by different manufacturers.”

For smaller vehicles, WLC wins the argument; for larger vehicles there are other considerations, such as load capacity. Safety specification, e.g. reversing sensors/cameras, can also be taken into consideration.

Fleets also have to consider the impact of legislation – for example, some contracts specify Euro5 which precludes some models. For cars, the usual restrictions apply to choice: no three-door models or soft-tops while CO2 caps are often in place.

Other influences are becoming more prevalent. Unions are an influence for some car fleets, while HR involvement can be the cause of lengthy delays.

“Unions are involved in the decision to implement telematics,” said one fleet. “You have to have employee engagement. It works in our favour in accidents – it can prove the driver wasn’t at fault. The police will accept the data although there is still uncertainty about it because it’s new and not proven in court. Claims are dropped though once we can show where are vehicles are.”

Telematics is becoming part of the procurement process due to its role in how cars are driven from a leasing company perspective which affects pricing per vehicle.

However, there is concern about leasing companies moving to a highly tailored pricing platform. “We have different drivers for different jobs, “says one fleet. “Also, there’s the complication of admin in having individual pricing for lots of drivers.”

Other concerns included multiple drivers per vehicle and the fact that systems work on different platforms which means no single source management reports.

Fleets felt it could work for exception reporting: unbudgeted costs, drivers falling outside of agreed KPIs.

Arval, which is not looking heavily into telematics-based pricing, prefers to see the onus put on the fleet manager to make the decisions on drivers rather than them being driven by leasing companies.

Most fleets review their choice of manufacturer partner once a year, looking at productivity and sharing the results with senior management and key departments.

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