Fleet News

CAP urges fleets to save service cash

FLEETS could reduce the wholelife costs of their vehicles by getting them serviced outside the franchised dealer network, even though it could damage residual values.

CAP Black Book claims that the cost savings of having vehicles independently serviced would outweigh the penalty of lower used prices.

Black Book senior editor Tony Styles, said: 'Received wisdom in the trade has it that main agent service history is the only acceptable paperwork for maximum resale value and, of course, manufacturers have been understandably happy to promote this view.

'Research confirms that there is indeed a difference in the used value of a car that has been serviced in the independent sector compared with one maintained by the original franchise dealer. On a typical three-year-old 'bread and butter' family car the presence of an independent specialist service history can reduce its value by up to £300.

'But with labour rates often less than half those in the franchised sector and parts prices significantly lower, it is possible to enjoy substantially reduced costs upfront that outweigh the reduction in used value on disposal.

'One example we have investigated is a major service cost of £90 per unit, compared with £270 from the main agent. This reduces the operating expenditure for a fleet of 5,000 cars by nearly seven figures annually.

'Detractors argue that such savings do not pan out long-term because of the used market's unquestioned desire for main agent paperwork. However, this entirely depends on how favourable the servicing costs are to the fleet customer.

'In the example cited, the cars would have to suffer a residual value penalty of more than £500 on disposal for the service savings to be wiped out and research indicates that the true hit is significantly less.'

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