When it comes to purchasing vehicles for your fleet, there are many more considerations than the sticker price of the asset. Asset acquisition, when done wrong, can have a crippling cost on your organization. However, when all factors are taken into consideration, like using Sweet Spot Analysis to find the right vehicles and managing financing and operational costs, it can save your organization millions! Using only manufacturer specifications on gas mileage and recommended maintenance schedules will not provide the best solution as manufacturers do not know the specific needs of your business. They do not know what the function of your fleet is. Your organization may make many local deliveries or strictly deliver large loads across the country. The need of your business will decide what vehicles are best to purchase, as well as HOW they should be purchased. Simply negotiating the cost of the asset upfront will leave potential savings on the table. Deeper analysis on the Total Cost of Ownership (TCO) must be done to take fuel, maintenance, and the correct specification fit for your fleet into account as these on average are eighty percent of fleet costs.
The cost of your fleet is likely to be one of the largest Capital Equipment expenditures your organization will make. Keep reading to see our recommendations on how to collect data, prioritize and analyze, purchase, and manage the cost of your fleet effectively!
1. Data Collection
One way to gather this data is to use software systems that aggregate this data with the help of Corcentric team members along the way. Many, including Corcentric’s offering, have a web-based portal that reports can be downloaded from on the fly. This could be vendor spend reporting, out-of-service reporting, and much more. However you get the data, make sure it is accurate and accessible.
2. Prioritize and Analyze
The next step is to perform some analysis on the data to prioritize what is most important to your company. The data you have already gathered can be analyzed to find the best vehicles for your specific fleet. Most importantly, you should attempt to find the vehicles that mitigate high operational costs. Remember that operational costs will be eighty percent of the Total Cost of Ownership.
The simplest way to do this is through Corcentric’s Sweet Spot Analysis. Simply providing Corcentric with the data you already gathered in step one, will allow for extensive analytics on how to best purchase and manage your vehicles. The data is run through a massive database of 800,00 fleet vehicles under management to compare pricing on many fleet related costs. The assessment will also offer you information on life-cycle management, fuel economy and consumption, maintenance and more. From this, you will be able to find the sweet spot on what type of engines, trailer configurations, re-marketing policies, financing structures, preventative maintenance, fuel programs, and much more, work best for your fleet. The best part is that it is provided for free. It allows Corcentric to show how effective we are at providing savings within your fleet.
No matter how the data is analyzed, or what tool is used, the decision of what vehicles suite your organization the best can now be made.
The last consideration is whether your organization should purchase or lease the vehicles. Many companies need flexibility where leasing will be more effective. Your company may not be able to spend the hundreds of thousands upfront on fleet vehicles to outright purchase them. Additionally, knowing that the most important aspect to look at is the Total Cost of Ownership (TCO), the cheapest price is not always the way to go. Paying a higher amount monthly for a lease allows for newer vehicles. This means that your operational costs, the eighty percent of TCO, are lower. Sweet Spot Analysis will provide you with the best vehicles to keep excessive operational costs down. This will save your organization much more in the long run. Luckily, this is another area where Corcentric can greatly help!
Based on affordability and obsolescence, leasing can provide the dexterity that many businesses require. Your working capital will not be tied up in buying enough expensive vehicles to fulfill your fleet. Also, with the speed of technological advances, your fleet will stay up to date with a lease. The time frame to replace an out-of-date asset is much shorter and may have little to no penalty. Corcentric offers very flexible financing for fleet vehicles. There is no initial cash outlay and terms are very flexible. This will keep your finances and attention on growing your business rather than concern over fleet costs.
4. Continue Analysis
Finally, just because you purchased vehicles does not mean the effort is complete. Creating an optimal acquisition strategy and maintenance policy are the keys to ongoing success. Fleets are expensive and their management is an ongoing effort. As long-time fleet specialists, Corcentric has an offering in Fleet Management, as well. The many years of working with large fleets has provided us a lot of expertise in this area. Whether it is policy development, better pricing on maintenance parts, ongoing negotiations, or risk-free enrollment, our program can benefit any fleet. We truly are a one-stop shop for any Fleet related need.