Fleet News

Four year replacement cycles increases SMR expertise

Vehicle leasing company service and maintenance expertise has grown in the last two years as a direct response to the recession, says epyx.

The move to four and even five year replacements prompted by tough economic conditions have seen leasing companies develop a whole range of new SMR buying skills and techniques.

Ken Trinder, head of business development at epyx, said: “The difference in SMR buying between three years ago and today is enormous. Vehicle leasing companies have raised their game by a huge margin, almost entirely because of the recession-driven trend towards replacement cycle extensions.

“When vehicles were almost all run on three year cycles and had three year warranties, there was a limited need for SMR expertise. However, because four and five year old vehicles that have reached a point in their life where major component failure is likely are now common on leasing company fleets, the demands on management have increased massively.”

Trinder said that epyx could see through use of its 1link Service Network service and maintenance e-commerce platform that leasing companies were much more proactive in their management of service and maintenance costs and had become intent on controlling spending at as finely detailed a level as possible using e-commerce technology.

He explained: “The platform is being used to exercise a much greater level of control over costs. The number of rules in place that control authorisation of SMR spending have increased several fold and become much more sophisticated, as have the tools that we provide for making them possible.

“This contrasts with the way in which leasing companies sought to control SMR spending before the recession, which tended to be by negotiating large scale supplier deals that were intended to concentrate spending power. Now, while deals covering prices and rates remain important, micro management of actual costs is where progress is being made.

“While leasing company spending on SMR has increased because of the ageing vehicle parc, the level of control they have achieved on an individual supplier-by-supplier basis is remarkable for its thoroughness and effectiveness.”

Trinder added that the process of gaining new SMR skills was continuing apace as difficult economic conditions persisted.

He said: “This is an area where leasing companies are examining their policies and looking at the possibility for new tools providing greater all the time. We expect that many will drive down their SMR bill further still over the next few years.”

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