Fleet News

When £1 pound spent means £5 saved

JOHN CHARLES visits the Eurofleet van and truck refurbishment centre at Corby in Northamptonshire Walk into Britain's first dedicated van and truck refurbishment centre and it is reminiscent of entering the casualty department of a major hospital. Vehicles of all shapes and sizes – from car-derived vans through to panel vans, small tipper trucks and 7.5-tonne Lutons – are lined up in neat rows waiting to be treated.

Some of the vehicles only require a 'quick fix' while others will need major surgery, but all will be driven out of EuroFleet's specialist facility in better health, with the refurbishment process having added significant value to the unit ahead of sale.

In the world of company cars, cash spent on at least valeting and smart repairing a vehicle at the end of its fleet life is regarded as money well spent as the outlay is easily recouped at the time of sale.

Just as returning a company car to 'showroom condition' can pay dividends at sale time, so exactly the same is true of vans and trucks.

EuroFleet has invested £500,000 in its Corby van and truck refurbishment centre. The primary driving force behind the initiative was the winning of a multi-million pound three-year contract to refurbish 7,500 vans and trucks on behalf of Norcom Vehicle Remarketing, part of Northgate plc.

Since then, the company has won other contracts from the likes of Sixt Kenning, TLS, Europcar, Fiat and Renault, with vehicles typically being up to four years-old and at the end of their rental or contract hire life.

However, just as those companies have realised there is value in enhancing the quality of rental vehicles so, says refurbishment centre manager Andy Smith, outright purchase fleets can also add value to their vehicles by refurbishing them ahead of disposal.

Smith said: 'Vans and trucks can be refurbished in exactly the same way as a company car. I believe our business will grow as van fleets become more astute in calculating the residual value of a commercial vehicle.

'When fleet managers are buying a company car they are taking into account the residual value of that vehicle at the end of its fleet life. With commercial vehicles, front-end price is everything – whether a vehicle is bought, leased or rented – and the back-end value is disguised or not considered.

'But fleets should pay just as much attention to the residual value of a commercial vehicle as they do to that of a company car to help reduce operating costs.

'Refurbishment costs on a leased vehicle will typically be recharged to the hirer, while damage on an outright purchase vehicle will severely hit its secondhand value. Smith says almost any vehicle can be refurbished to 'showroom condition' with model, age and mileage along with the cost of work deciding whether the van or truck enters 'hospital'.

'The only vehicle which cannot be refurbished is one that has been totally written off as it would not be financially viable,' he said. 'As long as the cost of refurbishment can be recouped through the sales process it is worth it.

'Frequently the decision to refurbish means a vehicle is sold more easily, which improves the owner's cash flow. A vehicle standing idle is costing its owner money.' Currently about 40 vans a day are inspected and processed at the refurbishment centre, with owners typically deciding that 25% of those vehicles will be sold direct to the trade due to their poor condition and high mileage.

Refurbishment work is then carried out on the remaining vehicles at a price and to a standard agreed with vehicle owners.

'Refurbishment work can take from 60 minutes to 60 hours, although the average is about 12 hours labour per vehicle. Our job is to add quality and value to the vehicle which enables the owner to achieve a better price either at auction or on the dealer forecourt than they would otherwise have done,' said Smith.

'The decision whether or not to proceed with the refurbishment and to what standard is financial. If the work enhances the value of the vehicle and allows the owner to recoup the outlay then refurbishment is authorised.

'Vehicles arrive at the centre at 'bottom value' and we have to drive them to 'top value' at a cost that adds value to the sale of the vehicle.'

Refurbishment standards vary from owner to owner, with Renault having two standards – 'gold standard' means preparing the vehicle for forecourt display. Meanwhile, a different customer requires 75% of vehicles to be washed and have their decals removed, with the remainder having only minor repair work carried out to bring them up to auctionable standard.

Just as with company cars, so the smart repair process is utilised on commercial vehicles. However, EuroFleet's refurbishment process is more extensive and includes about 5% of vehicles having at least one panel replaced.

Smith said: 'We go much deeper than smart repairs and with some of the vehicles they are presented to an aesthetic standard as well as being a workmanlike repair.'

Computers track vehicles throughout their stay in the refurbishment centre with customers able to check a vehicle's progress through daily status reports. Such technology also helps EuroFleet meet auditable deadlines.

EuroFleet's commercial vehicle refurbishment process:

  • The vehicle arrives at the centre and is washed and inspected
  • An estimate of the refurbishment work is prepared in line with pre-agreed standards
  • Refurbishment work is authorised
  • The vehicle goes through the 'quick fix' process of smart repairs to plastics and bumpers, glass is repaired and internal trim improved. Logos are also removed
  • Cold metal dent removal through smart repair process
  • Tyres and windscreen are replaced if required and the vehicle is serviced
  • Panels are replaced and the vehicle is painted if required
  • All damaged parts such as ply-lining, light lenses, radio, internal door panels, mirrors and aerials are replaced
  • The vehicle is valeted
  • The vehicle is returned to the customer or is held in storage awaiting further instructions.
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