Fleet operators looking to save money in a post-pandemic business environment are being encouraged to consider multi-bid fleet acquisition in order to drive down leasing costs.
The benefits are outlined in a new White Paper written by Keith Allen, former managing director of ARI Fleet and ALD Automotive and published by CBVC Vehicle Management.
Multi-bid acquisition can achieve leasing rate reductions of between £20-£50 per month than other methods and reduced exposure to risk.
Managing director of CBVC Vehicle Management, Mike Manners, said: “The benefits of multi-bid is that fleet renewal requirements are put before a panel of funders and the cheapest on the day wins the business.
“It means that fleets always benefit from the best value, delivering significant cost savings.”
The White Paper examines the different methods of vehicle acquisition.
While sole supply offers one master lease to administer and full access to the lease market, the White Paper concludes that it leaves fleets exposed to short term pricing strategies and rate fluctuation following residual value reviews.
With multi-supply acquisition a fleet can competitively procure leasing quotations from more than one lease company, but is then faced with multiple contracts, invoices, and relationships to administer.
With multi-bid acquisition a fleet can competitively procure business contract hire quotations from one fleet management company with a panel of approved lease companies. Among the advantages are cost optimisation on each new vehicle order and more consistency in the total cost of ownership with a single point of contact.
“Relying on one provider puts you at risk of ‘rate creep’ along with exposure to their risk profile. Both factors can severely impact business contract hire rental rates. By spreading your risk over a panel of funders eliminates these risk elements,” added Allen.
“Using a fleet management provider that has the ability to deliver multi-bid acquisition, provides one point of contact but transparent pricing, reduced lifecycle costs and enhanced service levels.”
He added that a fleet with 400 vehicles over a four-year term could potentially be saving more than £380,000 based on a cost saving of £20 per month per vehicle by adopting a multi-bid approach to procurement.