Posts Tagged ‘corporate leasing’
Don’t let your vehicles sit idle
Tuesday, April 27th, 2010
When you run a company that solves solutions for people, it is very difficult to watch people around you ignore the very problem that you can fix. Just this week I was sitting in my office and noticing all the companies around us that have vehicles just sitting on their lot. This is something that we talk to companies about time and time again but as I scan the handful of businesses just in our neighborhood, I see that the message is not getting out there.
It’s important to point out that vehicles are not like real estate, they don’t retain any sort of value. As a matter of fact, no matter how great you take care of a vehicle, it is going to depreciate. So, everyday that a vehicle sits on a lot, it is costing your company money. I will say that again: everyday that a vehicle sits on your lot, it is costing you money.
Think about that for a second. Would you pay rent on an office building you weren’t using? Would you pay an employee that wasn’t working? Would you pay a phone bill for a line you weren’t using? Unless there are some extenuating circumstances, the answer will almost always be “NO” but, for whatever reason, companies are willing to let money slide through there fingers everyday by letting unused vehicles sit on their lot.
Most of the time that we see idle vehicles, executives will tell us that they plan to keep the vehicle incase they can rehire, are stuck in a lease or simply don’t know how to handle the situation. Regardless of the reasoning, it is important to bring in a professional that understands proper fleet management. This may just seem like a plug for our services but really only a professional will be able to properly asses market value and create a plan to right-size your fleet.
I just request that if you do have vehicles that are not being used on your lot, you at least take some action. Calculate what the empty vehicle is costing you to sit there and then figure out if it makes sense for your company to remarket the vehicle. If you need help with doing these calculations, just let us know!
Tags: automotive leasing, business leasing, commercial fleet, company car, company vehicle, corporate leasing, fleet management, fleet manager, fleet vehicles, mayfair leasing, milwaukee, vehicle leasing, Wisconsin
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Stability in an uncertain economy
Tuesday, April 20th, 2010
After so many of us struggled to simply survive over the past year or so, it seems too good to be true that the worst is over. What I hear from fellow executives all the time is that they fear we will once again slide into a recession and all the gains we made will be for not. It is tough to make business decisions when the future can seem so uncertain.
Now, I’m no economist. I have no idea whether the gains we are seeing will continue or whether we’ll see another slump. What I do know though is that proper business planning will help prevent you from getting caught in an undesirable situation. I’ll use my business as an example.
As the economy starts to recover, we are seeing a need for additional staff to help us with some of our administrative duties. Normally we would assume that the growth we are seeing will continue and go ahead and hire a full time employee. At first they might not have a ton of work but eventually we assume they will get there. However, since we are not sure what the economy will do, we have instead decided to hire a temporary, part-time worker. This solution allows us to clear off the administrative tasks we need off our plate, without making a long-term commitment that may have to be broken down the line.
We also see this with our clients. A lot of companies we work with are starting to see growth and need new vehicles but are hesitant to get into a long-term lease. What we show them is that they can use our rental center to get the vehicles they need for anywhere from one day to six months. This way they have the flexibility to grow their business as they desire, while maintaining a proper sized fleet. Then, once they know the vehicles are needed long-term, they can make the switch to a lease.
Flexible options like these are all around us. What is important is that you do not allow fear of the uncertain to dictate the growth of your business. Be creative and look for ways that you can grow your business without unneeded responsibility. You can’t control what the future will bring, only how you will be prepared to handle it.
Tags: automotive leasing, business leasing, commercial fleet, company vehicle, corporate leasing, fleet management, fleet manager, fleet vehicles, mayfair leasing, vehicle leasing
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Fuel Efficiency Tips
Tuesday, April 13th, 2010
Time and time again we are seeing the same concern from our clients: fuel mileage. As gas quickly approaches $3, and is likely to hit $4 sooner than we think, the topic of saving on fuel costs moves to the forefront of people’s minds. We have been researching the topic and found that fueleconomy.gov is one of the best sites for learning more about the topic. What I wanted to do though was run you through their top gas mileage tips and show you how you can apply them to your business:
Drive more efficiently: It helps to gently accelerate, maintain the speed limit and avoid a lot of stopping and starting. It also helps to remove any unneeded weight, avoid excess idling and to use the cruise control. In your business, make sure your employees know that this sort of driving is expected when they’re in their company vehicles. Also, do checks to ensure vehicles are cleaned out and not being run when they needn’t be.
Keep your car in shape: We always suggest a proper maintenance plan for fleet vehicles and this is yet another reason why this is important. By keeping your engines tuned, tires properly inflated and using the proper motor oil, you can save your company some big bucks. Make sure you create a plan to regularly check and service your vehicles to ensure they stay in pristine condition and keep saving you money.
Choose a more efficient vehicle: We talk about Optimal Cycling a lot and people generally think we just want them to buy a new vehicle. However, properly cycling into new vehicles is a great way for your company to save money, not spend it. When looking for a new vehicle, consider what style of vehicle you need and then look for the best fuel mileage. Do not get stuck in an improper vehicle simply because it has the best mileage! Consider visiting the EPA’s guide for best fuel mileage by class to get a vehicle that fits your needs and saves you money: http://www.epa.gov/fueleconomy/class-high.htm. You can also compare different vehicles that you are considering on the EPA’s website at: http://www.epa.gov/greenvehicles/Trio.do
As everyone turns their attention to fuel mileage, stay ahead of the game and implement these tips to help your business save money!
Tags: automotive leasing, business leasing, commercial fleet, company car, corporate leasing, fleet management, fleet manager, fleet vehicles, fuel efficiency, mayfair leasing, Wisconsin
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The magic of numbers
Tuesday, April 6th, 2010
There’s a certain magic in numbers. We grow up learning how to add, subtract and even multiply them but this is not the purpose of numbers. You see, numbers do more than show us how much of something that we have. The true strength in numbers is there ability to tell you what to do.
We see this in our business all the time. A company will take the first step to good fleet management and they will track how much money they spend on their vehicles. That number then gets put into a spreadsheet and sits there. But what does that number tell you? All it shows you is what you spent overall. It doesn’t show you what you spent per mile or what you should be spending. It is simply a static number, not getting you any closer to know what you should do.
Let’s compare this to a family’s cell phone bill. Let’s pretend your significant other has been paying the bills but you have decided to take them over for whatever reason. You look at the bill and see that your family’s cell phone plan costs you $250 a month. Now, is this good or bad? Is this money going to minutes, text messaging or internet usage? Who in the family is using the most minutes? All of a sudden you can take a static number and break it down to it’s components.
Let me take this comparison to the next level. I stated earlier that good fleet management starts with collecting all of the data. What would happen if your cell phone company didn’t tell you where your money was going? Can you imagine if cell phone bills didn’t break out where each of those dollars were spent? I for one would be upset that I could not make proper cost-saving decisions. However, cell phone companies provide this information on almost every bill so that you know just how your money is being spent.
So let’s circle back around to fleet management. The first thing a company needs to do is make sure they have the technology in place to properly document their vehicle expenditures. Without it, you don’t get any magical numbers. Once this is in place, you need to look at the numbers for more than just their bottom dollar. By examining how that money is being spent, you will be able to make better decisions on how to properly manage your fleet. The best way to do this is to break the entire number down into a cost per mile. From there, your numbers will start to look like magic!
Tags: automotive leasing, business leasing, commercial fleet, company car, company vehicle, corporate leasing, fleet management, fleet manager, fleet vehicles, mayfair leasing, optimal cycling, vehicle acquisition, vehicle leasing
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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.
Tags: automotive leasing, business leasing, commercial fleet, company car, company vehicle, corporate leasing, fleet management, fleet vehicles, mayfair leasing, milwaukee, Smart Car, vehicle acquisition, vehicle leasing
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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.
Tags: automotive leasing, business leasing, commercial fleet, company vehicle, corporate leasing, economy, fleet management, fleet vehicles, mayfair leasing, vehicle leasing
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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
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