Unbundling services can save fleets money
Fleet operators can save thousands of pounds by ‘unbundling’ extra services including maintenance, vehicle hire and accident management from contract hire packages.
Contract hirers typically offer their clients additional services to the standard leasing package as there is an additional margin to be made on the add-ons. And there are also rebates to be earned from third party suppliers for these extra services. But, by going direct, or by employing a fleet management specialist to do this for them, many companies can make significant savings by not taking up the additional services on offer.
CLM has been offering its customers advice on unbundling the service elements of contract hire packages for many years and, in that time, has identified a number of key areas where savings can be made.
One of these is maintenance management which has the potential to realise significant savings if managed separately.
“We manage maintenance spend for a number of corporate clients as a stand-alone service and typically have been able to reduce costs by between 10% and 15% of the typical maintenance budget through using techniques we have developed in recent years,” said Chris Mitchinson, Director – In-life Services
These techniques can sometimes include the use of carefully selected independent garages to carry out regular servicing and maintenance work.
Often independent garage labour rates are less than those of their franchised counterparts as they do not have the same infrastructure and showroom costs that franchise dealers face.
As a result, we are able to pass on savings to customers but still guarantee that work is carried out to manufacturers’ warranty standards. It is important to stress that the driver still gets the same experience of collection and delivery or a courtesy car, so there is no impact on the service levels experienced.
Another initiative CLM applies very successfully is the use of pay-as-you-go (PAYG) servicing rather than fixed cost maintenance packages, which has produced savings of 10% to 15% for customers.
Within a PAYG maintenance contract, a fleet management company can control maintenance costs on the customer’s behalf and only invoice for work completed, rather than accruing for a set amount every month, regardless of whether it is needed.
Another management technique that should be employed to reduce fleet costs is the tight management of vehicle downtime, using an online downtime management module to track the progress of work going through the dealership and ensure it is on schedule.
“Our downtime management module contacts service garages via the Internet to ensure that work being carried out on customer’s vehicles will be finished on time, to ensure that drivers are not left without a vehicle or without any form of onward mobility.
“This cuts vehicle downtime dramatically, increases efficiency and reduces additional on-costs such as vehicle hire.” said Chris Mitchinson.
Managing driver and vehicle downtime is the essence of successful and cost-effective accident administration, another service that CLM offers its clients.
Experienced claims administrators handle all aspects of the accident. This ranges from the efficient processing of the initial driver incident report to the identification of the nearest CLM-approved repairer.
It also includes co-ordination of damage inspection and approval and the handling of all related supplier and third party paperwork, ensuring the whole accident is handled quickly and efficiently.
In addition, a range of comprehensive reports can be downloaded that provide detailed information to assist in risk management and identifying key driver trends within the fleet.