MAINTENANCE management: it’s a headache for SMEs running small fleets, especially when budgets are tight and there’s no decicated fleet personnel.
Maintenance management can not only be time-consuming, it can also be difficult to budget for and as a result, can have an unexpected negative effect on cash-flow.
Many businesses use contract hire, winding in maintenance costs as part of the deal. When you need to fix motoring costs, maintenance contracts have become increasingly popular.
For many leasing companies, maintenance contracts account for around a third of their net profit over the term of the agreement.
Due to their bulk-buy discounts, it can often seem that the customer is getting a good deal but could you manage vehicle maintenance requirements in-house and actually reduce costs?
Maintaining your own fleet
Budgeting effectively demands knowledge of the Service, Maintenance and Repair requirements of the vehicle over the lifecycle, often referred to as SMR.
Once this has been calculated, an estimated budget can be set aside and used as a maintenance pool, or costs could just be paid for as and when required.
Taking the time to evaluate and book reputable service and repair agents can be frustrating and not all offer the same quality of service or hourly rate; lease companies have established networks of trusted suppliers with reduced rates for their maintained fleet.
It is highly unlikely that any SME small fleet will be able to negotiate the same sort of discounts that leasing companies can negotiate. Remember also that funders will make sure that all companies who have contracts with them are more than capable of carrying out the maintenance work professionally.
Most SME company cars are managed by the MD or FD – not a full time professional. Unless you are in a position to employ a fleet manager who has experience, you could face being “ripped off” by repair agents as there will be no in-house knowledge of repair validation or authorisation checking.
Getting goodwill for out-of-warranty repairs can deliver large savings as vehicles reach their age or mileage thresholds; it is not usual practice for manufacturers to volunteer discounts to replacement parts or labour without some pressure from an expert in this field.
Tyres account for up to 50% of a maintenance budget so it is imperative that a good relationship with the tyre manufacturers and also reliable fitting agents is established.
Seeking out what’s best for the maintenance of your fleet
Leasing companies make their maintenance profits by using both their expertise and buying power but the sort of arrangements and discounts that they negotiate are also available to SMEs who wish to manage their own vehicles.
Look out for companies who have expertise in helping companies manage their own fleet maintenance requirements. It’s worth consideration before you either try to do it yourself or buy into a maintenance package to support your company car fleet.