Archive for February, 2010
Do you prefer national or local service providers?
Friday, February 26th, 2010
Earlier this week I told the story of my father-in-law that missed the Daytona 500 because the cable company could not properly service their client (http://www.mayfairleasing.com/blog/?p=49). I guess this is an issue in our industry as well. Just this week we met with a potential client that has tried two national leasing firms. They fired the first one after they mismanaged the account and are in the process of firing the second for the same reason. As it turns out, they are sick of 1-800 customer service and constantly changing sales representatives. When this came to my attention I began to wonder if this is something that a lot of people are looking for. What has been your experience with national versus local service providers? Which do you prefer? I greatly appreciate your input!
Tags: business leasing, customer service, mayfair leasing, milwaukee
Posted in customer service | No Comments »
Customer service failure
Tuesday, February 23rd, 2010
My family recently made the difficult decision to place my father-in-law into a senior care facility, which can be tough enough when things go as planned. My father-in-law was placed in a room that he wasn’t well suited for, which in of itself would not have been that big of a deal, but getting the cable switched to a new room would turn out to be a major pain in the butt.
As soon as a new room was selected, we called the national cable company to get the service installed in the new room. This is where the real difficulties started.
After talking with a handful of associates, probably all outside of the US, it was deemed “easiest” to cancel the current cable service and reorder it for the new room. This led to the cable immediately being turned off in the old room but no service in the new room. This was about mid-week and my father-in-law was beginning to worry that he would miss the Daytona 500 on Sunday. He is a huge NASCAR fan!
Well, after several more hours on the phone, we were able to get the cable company to promise installation on Saturday sometime between 1:00 and 3:00. Sure enough, Saturday at 2:45 rolls around and there is no sign of anyone to install the cable. The phone game starts again with several new associates, each having no clue about what the problem was. Finally, we gave up and decided to address it on Monday. My father-in-law would have to miss the Daytona 500 because a company was not able to properly serve their customers.
It made me appreciate a great deal more the fact that our company has real people that care about our clients. They’re available to speak with clients personally and empowered to immediately solve any problems that arise. It doesn’t give my father-in-law back the Daytona 500 but at least I know we are doing things the right way.
Tags: automotive leasing, customer service, mayfair leasing, milwaukee
Posted in customer service | 1 Comment »
How commercial leases differ from consumer leases
Monday, February 15th, 2010
Of all the commercial vehicles in the United States, about 51% of them are leased. However, when I walk into a company that falls into the other 49% category, it is usually because of misinformation that they do not lease. Its not anyone’s fault that the company was given the wrong information, it is that retail car salesmen rarely understand commercial leases.
When we talk about leases in a commercial application we are generally referring to open-end leases. Open-end leases mirror ownership in that there are no mileage caps and the company shares in the gain or loss from the sale of the vehicle. However, instead of being a capital expenditure, the vehicle becomes a monthly expense with a planned cycling point. Also, planning allows time to order vehicles instead of buying them off the lot so they are tailored to fit your exact demands.
What happens in an open-end lease is that an anticipated market value at the time of cycling is determined. This value is based on expected use and wear and tear of the vehicle. The monthly payment is then determined to amortize the cost of the vehicle over the length of the lease. From there the company uses the vehicle however they see fit. Once the vehicle is cycled with a new vehicle, the old vehicle is marketed for the highest possible amount. Assuming market predictions were correct, there is no additional expense. However, should the vehicle sell for less then expected, that difference will have to be made up but at the same time, if the vehicle sells for more than expected, the business profits.
What is also nice about open-end leases is that they do not lock a business into stringent constraints. If the case is made to replace the vehicle before the original lease term, it can easily be replaced with a new vehicle. This saves the company money by maximizing the market value and minimizing maintenance costs.
Hopefully this helps illustrate the differences between a commercial lease and consumer leases. Generally, open-end leases are the best way to accommodate commercial fleet applications. Should you have any other leasing questions, please feel free to email me at: dewald@ewaldauto.com
Tags: corporate leasing, fleet management, lease terms, open lease, optimal cycling
Posted in Vehicle purchasing | No Comments »
My beef with companies that buy their vehicles
Tuesday, February 9th, 2010
Spoiler alert! I am the president of a leasing company and, although this may come as a surprise to you, I recommend that all companies lease their vehicles as apposed to buy them. There, my bias is out in the open. I still want to touch on this subject though because it is something we see in a lot of companies. I’ll provide you my biased, albeit very smart, opinion and then you can make a better-informed decision from there.
The first problem that I see with purchasing vehicles is the fact that they are generally left in service too long and incur ridiculously high repair expenses. They are left in service too long because they are treated as capital expenditures. In most companies this requires a lengthy approval process before those funds are available. In the mean time, the old vehicle is depreciating and racking up maintenance costs. Leasing on the other hand forces you to make a decision as the lease term nears, yet still provides you with flexability. This is a perfect example of how leasing helps you maximize the optimal cycling point (http://www.mayfairleasing.com/blog/?p=23).
When companies buy a vehicle they look at the price of the vehicle and not the overall cost. Sure, you may be able to save a few bucks upfront buy purchasing a lower- priced model but are you considering how well it holds its value or will cost to operate? When you lease a vehicle you are comparing the total cost of ownership, not just the initial sticker price.
One of my favorite things about leasing is that it is easy. There are no heavy upfront taxes, intense record keeping or wasted capital. You simply get a pristine vehicle that will be properly maintained and replace at just the right moment. As an executive, not even I want to spend a lot of time thinking about company cars. Leasing allows for a simple, cost effective plan.
Alright, I have ranted and raved enough. Of course this is an important subject for me but I honestly would not bring it up unless I truly believed it would help companies save money and time. Hopefully next time your company is considering buying a vehicle you will at least be able to get them to consider an alternative. Thanks for the ear!
Tags: automotive leasing, business leasing, commercial fleet, fleet vehicles, mayfair leasing, milwaukee, vehicle acquisition, vehicle leasing
Posted in Vehicle purchasing | No Comments »
Holding onto your company vehicles to save money
Tuesday, February 2nd, 2010
In this tough economy we have heard a lot of companies state that they plan to hang onto their company vehicles for longer than they initially planned. Although this may seem like a great way to save money, the opposite usually ends up being true.
We talked last week about fleet management and what is required to ensure you keep your costs low (http://www.mayfairleasing.com/blog/?p=34). The week before that we talked about how optimal cycling can ensure you maximize your fleet dollars (http://www.mayfairleasing.com/blog/?p=23). This week we want to combine these topics to examine the idea of hanging onto vehicles for too long. Lets look at these two categories:
Maintenance: I want to talk about this because this should be the most obvious to a company. Although value of a car continually drops, it is the rising costs of maintenance that is easier to see and feel. We always recommend carefully tracking vehicle maintenance expenses, but if you do not do this, we at least recommend that you periodically review the service records of the vehicles and benchmark your expenses to national averages.
What you are most likely to see is a sharp increase in upkeep costs at some point in the vehicle’s life. When this happens depends on miles and condition. However, when it does happen your company is no longer saving money but rather loosing money on a car that should be replaced. If you fall into this category than you are dumping more money into a vehicle than it is worth, not a good idea.
Fuel: I want to talk about fuel next because again, it hits us in the pocket book. Although 2009 was a decent year for gas prices, it is predicted that we will experience future increases. As gas prices go up, it will be important to have the most fuel-efficient model vehicle that will meet your demands. The miles per gallon will differ for each company but most certainly newer model vehicles will have better fuel efficiency than their predecessors.
I could continue on with market value and depreciation but I have talked about these before. What I wanted to do was point out the two ways that keeping a vehicle for another year can actually cost money instead of save money. Just something to think about….
Tags: automotive leasing, business leasing, commercial fleet, company vehicle, fleet management, fleet vehicles, mayfair leasing, milwaukee, Wisconsin
Posted in fleet management | No Comments »