Managing a fleet of vehicles involves an immense amount of strategy and planning. Fleet managers are not only responsible for keeping their vehicles roadworthy, but they also have to know when it’s time to remarket older vehicles and procure new ones. The fleet procurement and vehicle remarketing cycle is vital to your business’s success.
The goal is always for your business to profit from a vehicle’s life cycle and to have a good ROI on each fleet vehicle.
This article will review the fleet procurement and remarketing process and discuss why it’s such an important part of a fleet manager’s job.
A Business Vehicle’s Life Cycle
There are three primary stages in a business vehicle’s life cycle:
The following section provides an overview of the process.
1. Fleet Procurement
The fleet vehicle procurement process is a multi-step endeavor that ultimately results in the acquisition of new fleet vehicles. However, the process isn’t that simple.
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Before leasing or buying the vehicles, you must first consider the type and number of vehicles you need, the insurance options available to your business, how you plan on training drivers for the new vehicles and the fleet maintenance program you’ll implement to keep the vehicles road-safe — just to name some of the elements to consider before actually paying for the vehicles.
It’s up to the fleet manager to optimise the fleet procurement process so that it profits your business in the long-run. If a vehicle isn’t expected to give you a good ROI, there’s no point in investing in it.
2. Utilisation & Tracking
The second major stage in a business vehicle’s life cycle is the utilisation phase. This is when the vehicle is being driven for business purposes and used on a regular basis.
During this stage, fleet managers need to stick to a maintenance schedule to keep the vehicle roadworthy and repair vehicles as needed due to accidents, regular wear and tear and so forth.
To extend the lifetime of a vehicle, fleet managers should install a fleet tracking system like Fleet Geo. Fleet trackers automatically track the mileage, fuel usage and routes of each vehicle. This information can be reviewed retrospectively and makes it easier to identify which vehicles are being under- or over-utilised, which need their routes optimised and which no longer make sense to keep in the fleet.
3. Vehicle Remarketing
The final stage in a business vehicle’s life cycle is the vehicle remarketing phase. Remarketing is the process of reselling used fleet vehicles. If a fleet manager has planned wisely and accurately tracked the vehicle that’s to be sold, it’s possible to secure a sale price that benefits the company and minimises losses.
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Why Are Fleet Procurement & Remarketing So Important?
Having a well-planned fleet procurement and vehicle remarketing strategy in place can save your business money in the long-run. When it’s time to remarket a vehicle, you can’t just take its initial price into account. You also have to consider the costs the vehicle accrued during its lifetime within your business — licensing fees, insurance costs, repairs, routine maintenance checks, vehicle wear and tear, accidents and so on.
Fleet vehicle management systems like Fleet Geo can help you pinpoint which of your fleet vehicles are draining your resources and which are proving to have a good ROI. Knowing when to remarket a vehicle and procure a new one is one of the key tasks of a fleet manager.
Extending a Business Vehicle’s Life Cycle
Fleet procurement and vehicle remarketing are the beginning and end of a business vehicle’s life cycle. A large amount of planning is required to ensure this process benefits your business. Regular vehicle inspections and cleanings, combined with a fleet tracking system like Fleet Geo can extend the life cycle of a fleet vehicle and secure a higher resale price.
No matter what stage of the procurement or remarketing process you’re in, contact Vimcar today to see how we can help you.