Traditional solutions covering the basics, such as contract hire, will remain the bedrock of business for most vehicle providers, but it is the additional options provided that could make all the difference.
Executives at multi-marque leasing company Alphabet believe that offering the A to Z of funding options is essential for fleets trying to meet drivers and employers’ needs.
The company believes it has identified four customer groups.
The first is the traditional company car fleet, with a dedicated fleet department. Second is the outsourced fleet, where the management has been passed on to a third party.
Thirdly, there is the company offering employees a car ownership scheme alternative to a company car, providing a vehicle with the same ‘hassle-free’ benefits, but because the driver technically owns the vehicle, it is not liable for company car tax. Finally, there is the affinity driver, who has never had a company car, but wants to buy into the benefits of discounts available through his or her employer, including access to vehicles.
Richard Schooling, commercial director of Alphabet, a part of the BMW Group, with an international network of sister companies, believes the firm’s experience and products give it a unique proposition for fleets.
It provides traditional contract hire, ECOS and all-employee car ownership schemes (ACOS), in which any driver in the company can buy into cheap car deals agreed with the employer, with payments taken directly through payroll.
He said: ‘Because of our parentage and extensive retail experience, it means we are more able to handle and work with individual drivers when they take part in affinity schemes.
‘With the drive towards more people opting out of company cars, we have been well-placed to have a close working relationship with drivers. For some schemes, it is almost a retail proposition.’
Last year the firm launched what it describes as the first complete vehicle funding package, AlphaDrive, designed to tackle the more complicated nature of providing vehicles to drivers.
AlphaDrive consists of three main elements which cover company cars, employee car schemes and a car ownership package that can be offered to the whole workforce. Schooling said: ‘We are seeing great interest from companies that want to move to integrated car benefits strategies.
‘The face of fleet is changing because of the growth of cash allowances and ECO schemes alongside traditional self-funded or leased company cars.
‘However, the focus on at-work road safety has brought home to many organisations the fact that they cannot simply turn a blind eye to employees who use their own cars for business.
‘AlphaDrive critically helps to safeguard companies’ current and future duty of care obligations by increasing their influence over what happens when drivers opt to use their own cars for work.
‘AlphaDrive provides the right funding and management for each group of vehicles, allowing companies to maintain integrity and quality across the whole spectrum of their business car use.’
Currently, all-employee car schemes and employee car ownership schemes account for about one-third of the Alphabet fleet of 30,000 vehicles.
Among the all-employee car schemes is the BBC, which has branded the service myDrive for its 20,000 employees. Since launch, the BBC scheme has seen about 1,000 drivers take a car, with the majority of them non company car drivers.
Perhaps more than most, Alphabet has to ensure that it is ‘whiter than white’ in creating and operating its schemes, because of its parent company, BMW.
Although Alphabet is multi-marque – with Ford one of the biggest manufacturers on its fleet – it is still aware of its responsibility to protect the BMW marque.
While the BBC scheme is a bespoke product, along with services provided for several other major clients, AlphaDrive aims to offer a more standard package for fleets to introduce.
To drive expansion in the business, the firm has expanded its new business sales team to 17 and last year alone it signed several deals with 1,000-plus fleets, several many of whom were claimed from other major rivals.
The firm is expecting growth of about 10% this year, which will be driven by growth in fleet size.
Schooling said that future choices for fleets about funding had to take account of a number of key factors.
He said: ‘I don’t think people are offering employees basic cash alternatives to cars any more than they used to.
‘They need to remember that their fleet size plays a critical factor in giving them the buying power to keep costs down. It is not really in their interests to lose drivers by simply offering cash. Structured schemes mean drivers can have a choice while fleets keep their size.’