We were requested to review a customer’s entire vehicle stock which consisted of outright-purchased, owned and self-managed vehicles. These were of varying ages (and conditions) and were being serviced & repaired on an ad-hoc basis as and when required at local garages.
In this instance, historically the customer’s own staff had been responsible for organising servicing, MOTs, licence checks, Accident Management, new tyres and so on – as well as the purchasing and selling on/scrapping of the vehicles.
Aside from being very heavy on resources, this inevitably led to lost opportunities on the leverage of the overall spend, patchy quality control over the garages’ work and of course a greatly increased risk around Corporate Liability.
We took the existing Asset Register and analysed the vehicles to be able to present a number of different tendered options around;
- Vehicle lists using Whole Life Cost analysis – entire running costs of each vehicle including mileage, insurance, Road Tax, tyres and windscreens etc of existing and proposed replacement vehicles
- Outsourced fleet management packages – what elements (if any) did the client want to retain in-house? Outsourcing the responsibility – and liability – for drivers’ licence checks, eligibility to drive certain classes of vehicles, Telematics, Driver Management, Accident Management and so on
- Vehicle disposal – either selling vehicles on and ensuring no liabilities could come back to our client or scrapping and managing the process
- We also talked to users, drivers and managers around the purposes that the vehicles were intended for to be able to submit different packages of replacements that were deemed more ‘fit for purpose’ – financially and operationally. This resulted in further indirect savings in reducing the number of FTEs needed to accompany passengers with disabilities as some of the new fleet incorporated tail lifts, winches, low-level flooring etc as appropriate
Suppliers were invited as part of the tender process to suggest and supply sample vehicles as demonstration models
The most cost-effective route after analysis was a 4-year Contract Purchase scheme. The supplier handled the disposal of existing vehicles deemed to be too expensive to keep running or not suitable for the intended needs, and took the balance on a ‘Sale & Leaseback’ scheme which gave the client a large injection of capital and meant that ALL vehicles could go simultaneously on to the same Management and Maintenance package – saving money and reducing liability
The end result was a cashable saving of around £300,000 – plus large indirect savings made as a result of the administration and management being taken out of the client’s hands. This saving (against the greater servicing, tax and general running costs of a much older fleet) was realised despite the majority of the fleet being replaced by brand new vehicles with much, much higher residual value for the customer and in many cases, being a better choice of vehicle for the purposes intended