Fleet News

Guest opinion: Don’t undervalue benefits of rental

Fleet costs remain a substantial proportion of most companies’ annual budgets and fleet decision-makers are under constant pressure to find ways to reduce them.

Although rental is viewed by most companies as a valuable ad-hoc service, the strategic benefits that rental can offer have often been overlooked.

This reluctance by many fleets to see rental as anything more than a last resort is something that the industry as a whole has been working tirelessly to change. It’s not the case that businesses don’t value a reliable daily rental service; the problem lies in determining what real value rental offers a company in a strategic capacity.

Feedback from fleet managers, HR departments and financial directors has highlighted a growing need for a level of consultancy over and above the standard rental service. It is clear that fleets want and demand a more sophisticated rental offering, focusing on strategic guidance as much as car hire.

Companies have always recognised the value of rental as a quick-fix solution – for example, in the event of fleet vehicles being off the road due to a breakdown or accident. What they have never considered was that rental could actually make a real impact on the bottom line, provided it was integrated more closely into their overall fleet policy.

To some degree, the explosion of temporary workers has assisted the rental industry in its efforts to change the way companies manage their fleets. With the increase in employees on short-term contracts, some contract hire fleet arrangements, generally three-year terms, are often too inflexible.

This has given rental a unique opportunity to stake its claim at the boardroom table. Leasing firms are growing more strident in their belief that fleet management is a strategic, consultative issue, so there’s no reason why rental can’t be perceived the same way.

Rental offers fleets a much more flexible product that can be factored into a long-term business plan. Rental companies have also responded to this opportunity by developing new product ranges such as longer-term rental or mini-lease to cater for the needs of the corporate customer.

It doesn’t stop there, though. More and more companies are recognising the cost benefits and flexibility of rental in other ways. For example, businesses affected by seasonal variations in sales are now replacing their pool cars, which often sit idle for weeks at a time, with a daily rental service.

The large players in the rental industry are also now offering online booking systems for corporate clients, speeding up the booking process.

It comes down to re-educating businesses on the strategic value of rental as a performance enhancer. In order to do this it has meant building closer relationships with companies and having a better understanding of their business models in order to provide that required level of consultancy.

This may simply be being on hand to offer expert advice on current fleet issues when customers ask for it. For other customers, it may be working closely with them to develop a bespoke service tailored to their specific needs.

The rental industry has to some extent shaken off it’s ad-hoc service tag and is now being taken much more seriously at boardroom level. There is a strategic shift in the way vehicle hire is viewed by fleet decision-makers but rental companies need to ensure this shift is a permanent rather than a temporary fixture.

The key to ensuring this happens is continual investment in people and infrastructure – building a larger, more convenient branch network supported by a team of experienced, dedicated employees with the knowledge and innovation to make a real contribution to the way fleets are managed.

Don Moore, vice-president, sales Enterprise Rent-A-Car

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