Potentially nothing is as emotive as company car policy. Cars are, for most people, exciting and, for some, they are a major part of their lives. Drivers want the vehicle to meet their business and private needs but without costing the earth. So, if an employer wants happy and motivated employees, a fleet manager who pays scant regard to vehicle allocation could have a devastating impact on the business.
The employer’s view
In an ideal world, drivers choose whatever car they want and cost is not an issue. In the real world, this translates to company car drivers want as much as possible at minimum cost.
So how does the fleet manager meet these disparate needs whilst still ensuring that the business needs are met?
- Understanding the needs of the business is a critical step towards a great fleet. If the goal is to use cars to recruit, retain and reward the best employees it will certainly result in a very different looking fleet to one where drivers need cars to do their job. Before embarking on a car selection process it is sensible that the fleet manager canvasses opinion from stakeholders representing other parts of the business to ensure that a comprehensive set of requirements is agreed and understood.
- Understanding the market is crucial, especially factors such as;
- who is offering what and for how much?
- how long will a model remain available?
- what’s the likely resale value? and
- is the fuel economy reasonable?
These are all questions that need to be addressed before a choice list can even begin to be built. Manufacturers, such as Volkswagen invest heavily in the fleet market and have a vested interest in helping businesses make the right, sustainable, decisions. Manufacturers and other suppliers, including dealers, want to build long-term relationships so helping businesses to design a fleet that is fit for purpose and meets the client ’s needs is in their best interests.
- Whether to implement a solus or dual badge policy can be a challenge for fleet managers. While efficiencies can certainly be realised from increased purchasing power and reduced points of contact, consideration should be given to whether one manufacturer has a model range that meets all the needs and aspirations of the business and drivers.
- Using list price or lease rental can seem like the logical way to choose vehicles but, in reality, the fleet manager should be concerned by the vehicle’s whole life costs while it’s part of the fleet. Depreciation (or rentals), fuel costs, maintenance, repairs, motor insurance, tax relief, National Insurance, and interest are just some of the items that make up a vehicle’s whole life cost. Taking as many of these into consideration as possible will enable the fleet manager to make a more informed decision. But one thing is certain – buying based only on list price, or leasing based solely on the rental – can prove to be a very expensive mistake.
The driver’s view
Why can’t I have the 4x4 that’s on special offer at my local dealership? Most people responsible for fleet policy will have heard similar questions at some point in their careers. While it may seem logical to chase good deals, the question remains is it practical to let drivers control the decision process?
- Fair and sustainable are words that should pay dividends when setting fleet policy. The normal indicators of list price and rental will mean little to a top salesman who feels aggrieved that they can no longer have the car they’ve always chosen, especially if a colleague is driving one because the rules have changed.
- How much does it cost? To many people cars are fun, but tax isn’t! Therefore it’s essential that employees are helped to understand how income tax is charged and whether they wish to pay the price. Likewise, a car must be fit for purpose, so even though a driver may want a smaller car with incredibly low tax, will it be fit for purpose if they regularly drive more than 1,000 miles per week.
- Many fleets will select a benchmark model and allow drivers to pay more to get their preferred car, or receive some cash back for choosing a car of a lesser value or lower cost. Although this may seem a great solution to the question of driver choice such a policy must be carefully controlled. For example, a driver offered a mid–range, premium car may opt for a 4x4 or SUV which has a lower lease rental and thereby appear cheaper, but which might actually have a significantly greater whole life cost.
Choosing the right car policy
Designing the right car policy can feel like a daunting task. Matching the needs of the business to the aspirations of its drivers is not always easy.
But, with a good understanding of the market, a set of well thought out requirements and plenty of focused communication, a good fleet manager can deliver cost efficient vehicles that are appealing to drivers.