Having for donkeys’ years arranged cars and vans on contract hire for all kinds of businesses and organisations spanning the tiny to the hefty, we’ve seen it all, from dedicated fleet management teams or at least someone from HR who’s got enough time to devote to it, to family firms juggling so many tasks that octopus envy began to set in.
For anyone who’s freshly been tasked with managing an organisation’s vehicles but is unfamiliar with what’s involved, we’ve rounded up the current best practice in fleet management, with baby steps purposefully in mind and overkill kept on the sidelines.
Purchase, lease or use short-term rental?
For smaller entities in particular, the acquisition of vehicles through contract hire/leasing, outright purchase or whatever other means often represents one of their largest areas of expenditure. Ensuring that just the right number of suitable vehicles are available to the people that need them for their respective roles prevents potentially costly surpluses and addresses underutilisation, keeping your superiors happy.
With PwC finding that just 32% of firms do so and Deloitte identifying an average saving across three years of £1,200, getting one’s hands on a whole life cost (WLC) calculator is highly advantageous, whatever the size of the organisation.
Of course, ‘acquisition’ is less relevant if you’ve been tasked with looking after any number of existing vehicles that have been knocking around for a while, perhaps including ‘grey fleet’ vehicles meaning private ones occasionally used for business – but matching the right number of suitably-specified vehicles to the right people can be borne in mind when you come to get your hands on one or more shiny new vehicles in the future.
Petrol, diesel, hybrid or electric?
An organisation’s finance director, accounts person or external accountants will be able to identify whether buying, leasing or short-term renting each particular vehicle makes the most efficient financial sense, but the fuel debate is a hot topic across business and media communities.
Fuel choice needs to reflect each vehicle’s typical usage and, to an extent, its driver(s). A holistic, balanced approach to the petrol, diesel, hybrid or electric conundrum is best, diesel still achieving the best fuel economy but essentially inadvisable unless motorways and over 15,000 annual miles are the order of the day. When it comes to plug-in hybrids, your colleagues may be keen to do their green bit for the environment, but commitment to a strict recharging routine is required for PHEVs to make any financial sense in terms of running costs rather than just tax. The latest petrol engines and self-charging hybrid cars are often good options to consider.
Identifying the right vehicle also touches on body-style, desirable SUVs admittedly looking cool but often attracting higher CO2 and therefore tax thanks to larger alloys and bluff aerodynamics while lacking practicality compared to estates.
Reliability is also part of the mix, along with servicing internals, parts and labour costs and other related variables, which can be researched online. Safety technology like autonomous emergency braking (AEB) and other advanced driver assistance systems (ADAS) are unsurprisingly desirable in safety terms and reportedly help reduce accidents by 38%, but organisations like the ABI, ICDP and NBRA point to repair costs rising 33% over the last decade, with calibration costs and other emerging technological necessities pushing repair costs for some models up by as much as £4,000. Even a replacement windscreen can cost around £1,000 for some plush models. Ouch, indeed. Keeping vehicles on the road is a priority, so opting for vehicles from manufacturers providing good aftercare and warranties leads to greater peace of mind, Hyundai offering five years while Kia still provides seven, for example.
Time to go green?
Opting for an unsuitable vehicle can prove to be an expensive mistake, except in the case of short-term rental, and just because the government and many other bodies are banging the ultra-low emissions plugin hybrid and electric vehicle drum these days, such supposedly green vehicles shouldn’t be rushed into. Organisations that really benefit from adopting PHEVs and EVs are those that develop long-term strategies based on vehicle usage, an accurate understanding of the taxation and running costs involved, the presence of any local Clean Air Zones, the availability of charger networks, plus support from driver(s).
The new and improved WLTP emissions and fuel economy test will apply to all new vehicles from September 2018 and it’s becoming apparent that the gap between the previous test’s (called NEDC) figures and the correlated values under WLTP is significant, especially for luxury cars of which CO2 has risen 18.3g/km on average and medium-size SUVs not far behind with a 16.7g/km increase across the market.
If some kind of fleet policy or other documentation isn’t already in place, anyone newly tasked with looking after an organisation’s vehicles should agree a framework with any owners/managers and compile as much information as possible for providing to the drivers. Ultimately, although it might sound scary, it could to begin with just be as simple as a Word document turned into a PDF, which can be printed out and handed to drivers.
The recent introduction of GDPR (the stricter European data protection laws) has left quite a few people feeling spooked but common sense should prevail in order to ultimately keep everyone legal and safe. If vehicles and ‘HR’ matters are handled by two separate people, the lines of communication should ensure that, for instance, any information on penalty points or driving disqualifications should be shared.
Fuel cards, telematics and other fleet services
Terms like ‘connected cars’ and ‘big data’ are all the rage these days and there are scores of different hardware and app-based telematics solutions out there combining tracking services, not to mention fuel card providers and an array of cloud-hosted fleet management software solutions they all integrate with. For medium and large fleets in particular, such technologies and tools are sensible investments in upholding the required duty of care and maintaining various efficiencies across both company cars and vans plus grey fleet personal vehicles used for work purposes.
Where just a handful of vehicles are involved, the law still applies as far as health and safety, but with many SMEs cautious with Brexit on the horizon and always mindful of costs, an Excel spreadsheet can be used adequately for maintaining driver records, MoT expiry dates, servicing records and the like. Just ask Maria here at Vehicle Consulting, who has expertly done it for years for various smaller fleets.
Equally, while hardware telematics offerings can cost hundreds of pounds per vehicle to integrate, app solutions cost from just a few quid per month and can be cancelled at any time, but it’s again a question of whether someone looking after an organisation’s vehicles as secondary to their main role will have the time to analyse driver behaviour and other data. There’s no benefit in analysing data for the sake of it, with no reasons or objectives in mind. This is where Vehicle Consulting can add value, our team including some chaps who get a buzz from interpreting vehicle and driver data for the benefit of our clients.
Reconciling accounts can sometimes prove a challenge, particularly around the time of VAT returns or when drivers are quite lax over submitting expense receipts, so fuel cards can actually prove worthwhile even for small fleets, benefits ranging from discounted fuel and the provision of easily-digestible payment records and reports to more efficient accounts reconciliation with fewer discrepancies. Vehicle Consulting has primarily long worked with AllStar who have an excellent UK presence, but we’ve got other fuel card partners up our sleeves, too.
In the business world, the company car has held onto its place as the most preferred mobility method for almost fifty years, but fleet managers are increasingly being encouraged to explore ‘mobility as a service’ (MaaS) solutions, from car-sharing clubs and ride-sharing to multimodal mobility combining public transport with electric bikes and other last-mile services. With vehicle taxation intrinsically linked to CO2 emissions, and with air pollution and public health often making headlines, it’s understandable that alternative forms of mobility are being touted to peel people away from their company cars.
UK public transport isn’t renowned for efficiency, cleanliness, comfort or most other factors, though, and many business journeys still involve multiple stops, unsurprisingly leaving many people hesitant about going green. Leasing funder Arval’s 2018 Corporate Vehicle Observatory Barometer identifies that, of the 3,718 fleet decision-makers interviewed, only 7% are interested in considering ride-sharing and 5% car-sharing, all from the 250+ employee segment, while just 2% of the drivers surveyed said they’d give up their car or share it with others.
For the time being, organisations with fleets of around 30 vehicles or fewer are best to bide their time and wait until MaaS solutions become even more advanced and widespread – but it would certainly be positive if more employees do decide that they can cycle or take public transport to and from the office, for example, or car-pool when several staff are attending the same conference. Cycling is for life, not just for shedding those post-Christmas pounds after too many puddings.
Achieving a healthy balance
Whether assuming the task on a full-time basis or alongside another primary role, fleet management can become all-consuming, so anyone newly taking on the challenge for the first time should remember that they’re only human and need to switch off fully from work outside office hours.
Good communication, information sources and relationships with colleagues, other departments and external suppliers will also help ease any possible feelings of pressure when it comes to fleet management if the role hasn’t been assigned to a specialist provider such as Vehicle Consulting.
With GDPR, WLTP and all kinds of other new acronyms and concepts to get to grips with, taking on the management of even a small fleet can seem daunting at first, but it’s possible to succeed by keeping things as simple as possible, not getting bogged down in excessive and perhaps expensive technology, and building up the role gradually in digestible steps.
If any of this resonates with you, we’d be more than happy to hear from you online or by phone (0161 431 0011) if you’d like a natter about how to make your new full or part-time fleet management role a success.