Fleet News

Guest opinion: adding up the true wholelife cost total

HARVEY Stead, sales director of AMC Accident Management, argues that accident and repair costs should be factored into wholelife cost calculations when choosing your fleet vehicles.

'If you were told that choosing between comparable company cars could mean the difference between tens of thousands of pounds in wholelife costs to your fleet bill, you would be interested, wouldn't you?

The argument that accident management and repair rates should be included in the calculations of wholelife costs and not simply the standard industry formula is becoming more persuasive, not least given the complexity of incident data capture and analysis now available to fleet managers.

Yet too often the provision of accident management and understanding and controlling repair costs is an area ignored by fleet managers.

The choice of which marque or individual model within a range is usually decided by capital cost, depreciation, CO2 emissions and even annual maintenance costs. Very rarely are accident repairs factored into the equation.

The figures can make for a sobering read. We have analysed our accident reporting database for the past 12 months, covering an overall fleet of more than 60,000 vehicles, and discovered that repair costs for comparable fleet vehicles could be up to 30% more expensive. For instance, there are sharp differences in the cost of an average repair bill of £750.

Our research showed that prices vary by up to 15% higher or lower than the average. If you're responsible for a fleet of 100 cars, you can expect to undertake 48 repairs a year. That means a difference of as much as £10,800 in 12 months.

Projected across a fleet of 100 cars over the wholelife of a usual three-year lease contract, this would mean total repairs costing an extra £34,000.

It is surprising that some large fleet operators are still working in the dark when it comes to true repair management costs, and they seem happy to function without this valuable information.

It is now a key strategy of AMC to offer analysis on a regular basis to identify all available cost savings. This is becoming increasingly important when clients are reviewing fleet policy.

And data analysis can help assess the impact of methods to improve driver behaviour. The rising cost of insurance excess premiums is resulting in more and more driver fining policies being enforced. But in most cases, they work on a fault-only basis so it's in the driver's interest not to be blamed.

Our findings show a 20% increase in non-fault/no-third-party records among fleets operating driver fining compared to those that don't. It may be that certain schemes need to be re-examined or that the way in which the policy is communicated to drivers needs examining.

But it is also true that the speed of improvements in sophisticated digital imaging and estimating systems are making it easier to trace the circumstances of vehicle damage.

It is possible in most cases to ascertain whether the driver's version of events is correct. The angle of impact, marks in paintwork and depth of damage caused are all good indicators of what happened and how.

It is perfectly feasible for accident management companies with the right systems to investigate closely each non-fault/no-third-party incident, and to identify, by individual fleets, the percentage of fault and non-fault accidents and the reasons given. Equally, data might also reveal areas where company behaviour or policy needs reviewing or adapting.

Is the layout of the head office car park a factor in the number of incidents there?

Instead of insisting that the sales force meets at 8am on Mondays, change the time to 11am to help reduce the number of your drivers on the road in the early hours and bring down the accident rate.

It is now possible to identify a host of trends. Given this level of information, fleet managers can piece together a true picture of wholelife costs.

  • Ed – Fleet News' monthly running costs include service, maintenance and repair figures which include the cost of accident repairs.'
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