Fleet News

Fleets ‘waste millions’ on franchised dealers

THE UK fleet industry could wipe millions of pounds off its service, maintenance and repair costs by better using independent service providers, it is claimed.

Estimates suggest leasing companies are currently spending up to half a billion pounds every year on routine service and maintenance, excluding tyres.

Executives at All Fleet Services, a supplier of third party driver helpline services to the UK fleet industry, believe that only 15% to 20% of fleet SMR work is performed by independent companies, despite the fact their hourly labour rates could be less than half that of franchised workshops.

Operations director Dave Scobie said: ‘There is a major opportunity for fleets to reduce their SMR costs if they are willing to adjust the balance of work they allocate between franchised and independent garages.

Many fleets are either unaware or dismissive of the independents, but they shouldn’t be. Well managed repairers can offer a similar service to franchised outlets, at a fraction of the cost.’

Scobie, who is responsible for making up to 15,000 service, repair and MoT bookings a month for All Fleet Services’ leasing company clients, estimates that the cost of an average service through the franchised network is £200.He claims this charge could be reduced by using independent repairers who would charge £150 for the same work – a saving of 25%. Figures produced by the company suggest that labour rates in London for a prestige marque could top £110 an hour, compared to between £40 and £60 per hour for a ‘quality independent’.

It also claims that while franchised dealers could charge between £12 and £15 for a litre of synthetic oil, this compares to between £7 and £8 at an independent. The company believes fleets’ attitudes towards independents are changing, suggesting about 20% of fleet work is now carried out by independents, compared to half that 18 months ago.

Residual value forecasters CAP said fleets should investigate what impact using an independent could have on a car’s residual value, particularly when it comes to full service histories.

Figures collated from its Market Value Manager (MVM) database suggest that a non-franchise full service history can reduce the price of a three-year-old BMW 318d SE with 36,000 miles by £800, negating any savings made on SMR costs.

Colin Whelan, manager of CAPcalc MVM, said: ‘There are significant savings to be made by choosing an independent service provider. It is essential, however, to ensure that these outweigh any potential penalties when the vehicle is sold on.’

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