Which Fleet Services Should You Outsource?
Following on from our recent blog: Six Questions a Fleet Manager Needs to Ask About Outsourcing, in which we consider and answer six questions aimed at helping fleet managers decide whether to outsource, what and who to – we look in a little more detail at which fleet services to outsource.
As well as outsourcing the whole fleet, there are many scenarios for partial outsourcing of selected fleet-related functions that can be successfully outsourced to a specialist provider to take some of the burden off the in-house department.
These can include vehicle sourcing and purchasing; funding management; maintenance – either scheduled or pay-as-you-go; all fleet admin; legislative compliance such as P11D and P46 reporting; fuel management including the provision of fuel cards; accident management; and, for fleets which outright purchase their vehicles, vehicle disposal.
There are also a number of driver services which can be outsourced including licence checking, mileage recording and grey fleet management for employees who use their own cars on company business.
CLM provides some or all of these fleet services for outsourced fleet clients and one area that has proved particularly popular and where we have considerable expertise is the management of maintenance for clients who have outsourced this aspect of their fleet.
Many companies opt for a contract hire package with a fixed-cost, maintenance-inclusive element, which charges a regular amount per month per vehicle as it simplifies their budgeting process, and offers a tidy, no-risk package with one known price.
However, such companies are missing out on significant cost savings by not electing for a pay-as-you-go (PAYG) maintenance scheme instead, a system that only allocates maintenance costs as and when they occur.
At CLM Fleet Management, we believe PAYG maintenance is the more cost-effective option for our clients and experience shows us that average savings of around £800 per vehicle contract are possible by opting to go down this route. As a result, we proactively manage maintenance costs for some 85% of our clients on a pay-as-you-go basis, as well as offering it as a stand-alone service for some clients.
PAYG maintenance offers a number of benefits including improved cash flow, more transparency and greater flexibility, and we proactively manage the client fleet to ensure that all vehicles fall within the maintenance budget, thereby ‘smoothing-out’ any spikes in maintenance spend.
To ensure our service is as cost-competitive as possible, we provide our clients’ drivers with access to a national network of preferred garage servicing outlets which combine franchised, non-franchised, and mobile repairer options. Bookings can be made online or through our call centre booking facility.
An in-house team of experienced fleet controllers ensures costs are pre-authorised in line with the work to be undertaken against agreed dealer labour and parts charges. And we manage all garage invoice administration, consolidating all validated costs, with full cost centre analysis.
When it comes to customer service, our clients’ drivers receive the exactly same benefits they would receive within a maintenance-inclusive offering, Including a collection and delivery service or courtesy car, and vehicle cleaning prior to return.
“We have developed an excellent working relationship with CLM … Their levels of expertise and professionalism have taken the management of our fleet to another level.”
Should you outsource to your leasing company or an independent fleet management company?
Many fleets outsource services to their leasing companies, but does this give the best, impartial and most cost effective solution?
In its simplest terms, contract hire is simply a vehicle financing option to provide a company with the use of a vehicle over time.
While contract hire agreements can and often do include maintenance packages that cover vehicle servicing, contract hire does not address all the fleet administration, driver support and management and strategic fleet decision-making and advice needed to effectively operate and manage a fleet.
Companies opting for contract hire often have an expectancy that all the fleet administration disappears, but this is typically not the case.
A fleet management specialist, however, can handle all fleet admin, driver support and strategic fleet advice required to optimise the efficiency of the fleet.
A Smarter way!
At CLM we have a primary outsource service which we call Smartpanel. This solution utilises individual vehicle order tendering from competing contract hire and leasing suppliers to provide our clients with the lowest possible acquisition costs as well as handling all the associated fleet administration.
Smartpanel employs a carefully selected panel of competitive leasing suppliers and a tender process for each new vehicle, which creates competition between the panel members and leads to the lowest rentals being submitted.
We typically work with three or four contract hirers for each client, and only select the cheapest quote for each new car ordered, ensuring the best possible rentals – great news for companies that are looking to cut costs and maintain their profitability.
This ensures our clients enjoy optimum rentals that will not suffer from ‘rental creep’ over time, as well as providing the management of legacy suppliers without conflict of interest.
Used in this way, Smartpanel has saved many tens of thousands of pounds in acquisition costs for our clients and typically achieves average savings of £870 per vehicle contract.
If you are considering which fleet services to outsource or would like help or advice with any aspect of managing your fleet, please get in touch with the team at CLM.