Fleet News

Make the right decisions to cut your SMR costs

Service, maintenance and repair (SMR) costs are one of the key influencers in compiling total cost of ownership figures, which is the key barometer for vehicle selection.

It therefore makes sense to minimise annual SMR spend by selecting the most cost-effective vehicles for fleet operation.

Having selected the ‘right’ vehicles by taking into account issues such as model reliability, warranty duration and wholelife cost numbers, it is critical that drivers are managed and made aware that it is essential they look after what is a valuable company asset.

Additionally, fleet managers must decide where they are going to have their vehicles serviced and repaired – franchised dealers, a local independent garage or a fast-fit. The choice is plentiful and the competition intense.

SMR is often underestimated, according to Stewart Whyte, managing director of fleet consultancy Fleet Audits, who says: “SMR is an ingredient in the wholelife cost equation.

"Fleet operators should not give drivers a free vehicle choice and then worry about SMR expenditure.”

He recommends fleet managers:

  • Exclude known ‘troublemakers’ from vehicle choice lists.
  • Take account of warranty duration when selecting vehicles – for example, Kia offers seven-year cover and both Hyundai and Toyota five years compared with the traditional three years – and exploit warranty claims.
  • Analyse the cost of service packages such as Mini’s ‘tlc’ cover – the standard package costs £200 for five years/50,000 miles – and, almost certainly, it will prove to be a ‘no brainer’.

Angela Montacute, Arval’s operations director, says: “With the right SMR strategy, it is possible to effectively manage and, in some cases, reduce costs while properly maintaining the fleet.

“Selecting the right vehicles can have a significant impact on costs. Our analysis shows that some makes and models are statistically more reliable than others while some have long warranty periods which can reduce expenditure if things go wrong.”

One of the big choices facing fleet managers is where to have SMR work carried out.

Alan Lilley, ING Car Lease’s head of technical services, says: “While many businesses that have a good relationship with a local independent will often continue to use these for servicing, all of our research shows that fleets can get far better value for money by using a network of suppliers.

Many of the national fast-fit chains are offering great deals (Kwik-Fit Fleet has seen demand for servicing increase 35% this year), so it’s worthwhile seeing what the market has to offer before signing a long-term SMR contract.

“Secondly, lots of the vehicle manufacturers – such as Vauxhall, Volkswagen, Ford and Audi – are offering very attractive SMR schemes that could reduce bills by as much as 25% when compared to the industry average.”

Supplier reputation is key, according to Montacute, who says: “Using the wrong supplier can be an expensive mistake with botched work often costing more to rectify than the initial problem.”

She adds: “Whether using a franchised dealer or independent, it is important to understand the total costs associated with any work before going ahead. While labour costs may be cheaper with one supplier, there is no guarantee that the final invoice will follow suit, as labour times and parts pricing can vary significantly.”

Julian Bailey-Watts, Fleet Support Group’s technical services director, warns: “While the headline service and repair price may be aggressive, dealers will look for every opportunity for work to be undertaken and ‘upsell’ spare parts to the unwary.”
 

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