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Service plans: how they can save fleets money

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“Our contract hire with maintenance contracts on our cars cover virtually everything although we find that the maintenance pot is never used up fully, on average.”

Dealer location has to be considered. Eynon says: “We are keen to reduce business mileage and if the main dealer is further away than the non-franchised dealer, does it make sense to use them?”

Service plans/packs do not appeal to another fleet manager, who asked not to be identified, because “they tend to be too loosely written in terms of what is included and not included and they don’t allow for any additional work/parts that may be required, so it’s still not a fully budgeted cost”.

He adds: “I would suspect that once the dealer had the vehicle, then they would look closely for chargeable additional work to generate another revenue stream.”

Zenith uses service plans if there is a benefit to it and its customers.

Mark Connor, operations director at Zenith, says: “You need to consider not only the cost compared to standard servicing through the franchised dealer, but also a cost comparison versus the independent route.

“You also need to factor in that this will probably increase your costs for work not covered under the service plan (particularly where you have a policy of using independents), as the vehicle will be captive in a franchised dealer.

“In the case of the BMW service pack, you need to factor in the cashflow impact of buying the pack at the beginning of the contract, together with any view on the residual value of the pack should your contract finish early.

“A fleet manager will have the same perspective as us – how do I deliver the most cost and service efficient process for my fleet? Service plans will sometimes deliver this, but not always.”

What fleet managers think about service plans

If I was to use a service pack then the dealers would have to match my expectations in terms of lead in time for servicing, which is not often possible in my local area.”
Damian James, head of operations at Bracknell Forest Borough Council and chairman of ACFO

“Service plans can be good. It’s important to do the maths before committing just to make sure you’re not paying any more than
the equivalent number of services would have cost, but there’s generally a saving to be had. Also, if you lease your vehicles the plan can be built into the cost and the payments spread over the term so there are no nasty shocks and it is good for budgeting.”
Graham Short, fleet and property operations manager, Evander Glazing and Locks

“Service plans appeal to me provided they are better value than the standard offer from my leasing company. I have previously taken BMW and Mini offers.”
Justin Patterson, head of fleet management, Mitie

“I would consider removing maintenance from my contract hire agreement if service plans were available that genuinely covered all servicing, etc. without hidden costs in the small print. It would have to be on a piecemeal basis though.”
Debbie Floyde, group fleet/risk manager, Bauer Media

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