Around 75-85% of car leasing contracts have a ‘with maintenance’ agreement whereby the fleet pays a monthly rate that covers the cost of both the contract hire and the service, maintenance and repair (SMR).
It’s the ultimate peace of mind approach: no unexpected charges from unbudgeted repairs and the admin/payment process is largely handed over to the leasing provider.
But a growing number of fleets are considering alternative ways to manage and pay for their SMR needs.
And, of course, fleets that outright purchase their vehicles – particularly those with vans – already use different processes.
The reasons? Cost, convenience and service. Leasing companies themselves are increasingly switching repairs from franchised dealers to independents, which reduces costs and – according to some – improves service levels.
But what can fleets do?
It’s important to state that a move away from a ‘with maintenance’ contract is not for everyone: any variation in the process will increase the admin involved which will increase the need for an in-house resource.
With many companies preferring to outsource their fleet functions, this will not be an option.
However, companies that do have dedicated staff handling fleet policy could consider several alternatives.
We’ve spoken to four fleets, each of which takes a different approach to their SMR needs, including one that has the conventional ‘with maintenance’ policy.
Each outlines the key reasons why they have adopted that process, including any pitfalls they’ve encountered.
And we’ve provided a summary of the type of fleet each option will best suit.
The best method for your business will depend on the type of fleet you operate (car/van, leased/bought), the type of usage of that fleet (job need/perk) and the company’s view on in-house/out-source controls.
It is always worth looking at how the various options fit into your existing and future fleet strategy.