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02
Oct
Managing Fleet Depreciation to the Fullest
Fleet Managers juggle a lot of different variables in their day-to-day schedule, but they can strategically reduce their costs by honing in on depreciation. While variable costs are important, depreciation amounts for more than half of all fixed costs and can be a tricky language to decipher. Depreciation is boiled down to a vehicle’s original cost and its resale proceeds, but there are plenty of moving parts within each area that can make or break a sale.
Choosing the right features
While upgrading the trim of a vehicle may seem like a good idea for adding resale value, some bells and whistles will not appeal to a buyer simply looking for a basic model with a low price. By considering the efficiency and necessity of specifications, as opposed to their immediate appearance, managers can help retain resale value of their fleet vehicles.
Reselling right under your nose
When you’re looking to sell an out-of-service vehicle or replace part of your fleet, the best sale may be standing right in front of you. Offering an employee and driver purchase plan not only provides a valuable perk to working for your business, but it can also maximize the dollars you get out of each sale, as selling internally splits the difference between the resellers market price and what your employees could find on the retail market.
Enforcing no-brainer maintenance and reporting
A fleet manager can’t possibly perform physical checkups on every vehicle they manage, so staying up to date on condition reports is essential. Requiring a detailed quarterly report with photos of notable issues and noises will keep you informed on vehicle quality and overall value. Requiring and enforcing a routine maintenance policy as well as keeping a detailed history helps ensure resale quality.
Smart sourcing
Often, a business operates most effectively when it’s made up of independently moving parts. Team up with separate offices when making a purchase, to maximize your buying power. Effectively utilizing some resources can help you avoid buying directly from the dealer in the case of an emergency purchase.
Timing and Cycling
Timing is everything when replacing vehicles. You optimize the value of your replacement vehicles by replacing old vehicles just a bit early, or by waiting a few months and thousand miles past your normal point of substitution. This ensures you get a full model-year benefit when it comes time to sell. Keeping an eye on the volatile resale market can help inform your decision on whether to hold out or strike while sales are hot.
Knowing what you should pay
Understanding vehicle manufacturing costs can provide a valuable negotiation tool with both manufacturers and dealers. Many manufacturers offer Competitive Assistance Programs in return for guaranteed orders, which can save thousands of dollars.
Depreciation can feel like a Rube Goldberg machine at times, with each factor influencing the next. Balch Logistics can help take the complexity of vehicle transport off your shoulders and simplify the process. Our door-to-door service means your vehicle won’t be sitting at a terminal or drop yard waiting for the next truck to pick it up. We stay in control of the transport from pickup to delivery, and our only end-goal is making you happy. Please visit our website to see what we can do for you.
