Archive for March, 2010

How smart is the Smart car?

Tuesday, March 30th, 2010

The naming of the car is pure genius.  I mean you would have to be an idiot to not want to own a Smart car.  The fact that you would even consider another brand makes you feel foolish.  Why would they call a car Smart, if it weren’t indeed smart to own one?  Of course, Bill Shakespeare did say something along the lines of “A rose by any other name would smell as sweet.”  Maybe the name isn’t all its cracked up to be.

Now, I’m not saying that Smart cars are bad vehicles.  All I am trying to say is that there are a lot of vehicles that are smart to own.  Furthermore, what is smart for one person to drive may be down right stupid for another person to drive.

The appeal of the Smart car appears to be its gas mileage.  One would conclude a vehicle the size of a go-cart would get pretty good gas mileage.  However, the average Smart car gets around 35 MPG and there are a lot of other options that get the same mileage.  What is great about the other options is that they actually have room for more than two people and a large purse.   The entire point I am trying to make is that purchasing a vehicle, especially for a business, is a complex equation.  It is something that should be carefully considered.

I’m also not advocating that gas mileage shouldn’t be considered.  To the contrary, gas mileage is an important consideration when selecting which vehicle to purchase.  By increasing your vehicle’s MPG by just a few gallons, you can save hundreds of dollars a year.  Check out our Fuel Mileage Savings Calculator to see just how much money you could be saving.  If you are like our customers and have a fleet of vehicles you must keep filled with gas, the savings can add up very quickly.

The trick is to not jump into a vehicle simply because it would seem to have the best gas mileage.  Consider your usage of the vehicle, any possible limitations of the vehicles and what sort of image you want your vehicles to project.  This process may end up leading you to a Smart car, however, any vehicle that you select this way will be smart.

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Making smart decisions in tough times

Monday, March 22nd, 2010

This recession has been hard on a lot of people.  Over the past two years companies have had to make tough decisions to try to stay in business.  I know that there is no worse feeling than having to let employees go or cut back on what you offer your employees.  However, simply because times are tough, does not mean that it is okay to stick your head in the sand.

Now, I’m not saying this is a wide spread phenomenon so if this doesn’t apply to you, I apologize.  However, I am noticing more and more companies that are having a tough time facing some of the issues in their organization.  In my industry we see a lot of companies that simply are not in a position to talk about leasing new vehicles.  Fair enough, if you don’t have drivers to fill the seats, you don’t need new vehicles, understood.

Where I am seeing the disconnect is the companies that have had to let people go.  As I said before, I know there is just about nothing worse than having to let people go.  I further understand that you have every intention on hiring back the employees as soon as the economy recovers.  However, we are seeing a fair number of companies that have had to let employees got but they hang-on to their company vehicles.

The useful company vehicle has now become a piece of iron that is sucking your company of needed cash.  Although you might not be seeing this directly, market value and depreciation are very real costs to consider in owning a vehicle.  By keeping vehicles on your lot that you are not using, you are preventing your company from collecting on the capital from their sale and costing your company money in depreciation.

Instead of ignoring the vehicles that you are no longer using, it is important to ensure you right-size your fleet.  This means that you remarket any vehicles that you are currently not using and then grow your fleet when the time comes.  Although this may not seem like a major issue for your company, in tough times, every dollar counts.

So please, set some time aside this week to review your fleet.  Is it the right size for your company?  Should it be bigger or smaller?  What are the cost-saving opportunities?  Answering these few questions, on a regular basis, will prevent you from costing your company any unneeded money.  Hopefully these smart decisions help you through these tough times.

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Spring is in the air

Tuesday, March 16th, 2010

I for one love this time of year.  As the snow starts to melt away and things start to bloom I cannot help but feel invigorated.  It is always great to see all the smiling faces walking around town on the first warm day of the year.  As winter ends, so too does our hibernation.

It is not too surprising  then that spring is a great time to look into cycling your fleet vehicles.  As people come out from their winter long slumber they will be looking at options to upgrade their fleet.   Spring is the perfect opportunity to remarket your vehicle to ensure you get the most money  from your investment.

Also, if you acquire a new vehicle now,  the lease term expiration will align  with cycling during the spring months, when car values are at their highest.  We’ve spoken about optimal cycling before but if you are not familiar with it, check out this link: http://www.mayfairleasing.com/blog/?p=23.  What this means is that you will automatically cycle your vehicle when the market value is at its highest.

So what happens if you  need to lease a vehicle in the winter months?  Don’t worry; you are not out of luck.  We offer odd term leases to our clients so that the vehicle will be cycled during optimal buying time, instead of the dead winter months.  If you did not do this then look into your options of ending your lease early or extending it a few months.

For those of you that purchased your fleet vehicles, now is the perfect time to consider cycling them, if it makes sense.  We see a lot of companies that  have unused vehicles sitting on their lots due to the downturn in the economy.  Instead of having that  depreciating asset  sitting on your lot, make use of this spring buying season to turn that iron into cash.  As the economy starts to turn around you will have many options to maintain a right-sized fleet.  (More to come on that next week!)

Spring is not only a beautiful time for getting out and enjoying the weather, it is also a beautiful time to look at your fleet vehicles.  Consider if it makes sense to cycle your vehicles and if it does, take advantage of this seller’s market!

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What’s in a name?

Monday, March 8th, 2010

Last week I learned about business intelligence systems for the first time.  For those of you that are in the dark like I was, the idea behind business intelligence is to gather as much internal information as possible to support decision makers.  This allows businesses to make the best possible decisions regarding their internal processes and procedures.  The concept was very familiar to me but it was the first time that I had heard it called that.

As I started researching the meaning of business intelligence systems I started thinking about my own company, Mayfair Leasing.  Business intelligence uses data mining, reporting, performance management, benchmarking and predictive analytics to support decision makers.  We use much of the same information to support our clients.  We are continuously monitoring their vehicle fleets to allow them to make the best possible decisions.

So perhaps the name “leasing” has been holding us back this whole time.  We already have to fight off the misunderstandings about commercial leasing because of our name; perhaps we have been too narrow.  We’ve toyed around with the concept of Ewald Business Services to describe the complete line of offerings we provide but we have yet to commit to the name.  Maybe it would be best to consider a name that includes our business intelligence capabilities.  Would Mayfair Fleet Intelligence Systems peak more interest?

I would like to turn the idea over to you.  Yes, we are a leasing company but we really have so much more to offer our clients beyond a great vehicle.  Do you think a different name would spark interest in our prospects?  Would they understand what the name meant?  I would love your feedback on the topic.  If you would like, you can respond privately at: dewald@ewaldauto.com

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Avoiding price shopping

Tuesday, March 2nd, 2010

In this economy it is hard to fault price shoppers.  We all want to save money wherever we can, however we can.   Sometimes simply looking for the best price tag can actually back fire.  This is especially true when purchasing a vehicle for your company.

All too often people look for the lowest cost vehicle that will meet their needs and they think they are saving their company money.  However, without understanding the total cost of ownership, this might not be true at all.  Instead of looking at the one time price tag, the buyer should focus on the operational Cost Per Mile (CPM).

CPM takes into account fuel, maintenance and depreciation when looking at the cost of a vehicle.  A vehicle that was inexpensive upfront may not get the best gas mileage, may be expensive to repair and could have a low resale value.  If this is the case, the vehicle that you thought was saving you money is actually costing your company more money than an alternative vehicle.

In addition to helping you purchase the best vehicle for your company, a CPM analysis also allows you to know if a vehicle is operating at a higher cost than it should.  If one vehicle in your fleet has a higher CPM than the rest then it will be important to find out why the vehicle is costing so much more to operate.

Beyond CPM, you also want to make sure the vehicle that you purchase fully meets your needs.  We see a lot of companies that buy their vehicles off of a showroom floor and the vehicle either doesn’t meet the needs of the company or has far more features than is required.  In either case, you will be spending money that does not need to be spent.  Instead, you should focus on building a vehicle that will perfectly fit your needs.

Although it would seem to make sense to simply purchase the least expensive vehicle, you can see that a lot more should go into the decision.  Hopefully this helps you purchase a vehicle that is the best value for your company.

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