Posts Tagged ‘Wisconsin’
Need to Reduce Expenses?
Friday, July 9th, 2010
There are many areas in a company that can benefit from reducing expenses. One of the most overlooked areas is managing your company’s fleet. There are 4 major costs associated with a company vehicle. We would like to review some of the most common errors that could result in over spending.
Acquisition- Does your company take advantage of all discounts and incentives available to businesses?
Maintenance- Does each vehicle in your fleet have a detailed maintenance history? Do you have controls in place for vehicle maintenance expenses?
Depreciation- When you purchase a vehicle; do you have a plan set as to when you will be cycling this vehicle out of your fleet?
Fuel- Is every gasoline purchase your company pays for going into a company vehicle?
For more detailed examples on how you can save money on your company vehicles, please read more.
Tags: automotive leasing, business leasing, commercial fleet, company car, fleet manager, fleet managment program, vehicle leasing, Wisconsin
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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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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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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
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What is good fleet management?
Tuesday, January 26th, 2010
Having been in this industry for over thirty years, I have seen a lot of poorly managed vehicle fleets. This is generally because fleet responsibility falls into the hands of someone that has many other resposnsibilities. Although I understand why this is, it is unlikely that the person that the responsibility falls on either has the time or truly understands how to properly manage a fleet. This is no fault of their own so I figured I would give a little guidance as to how to manage a fleet.
The key to all great management begins and ends with the information. When a manager is empowered with the right information, they will be able to make the proper decisions, instead of guesses. The information that a fleet manager needs corresponds with the four costs areas associated with vehicles:
Acquisition: Most companies purchase their vehicles as a capital expenditure. By moving to a leasing option, the acquisition cost becomes an expense and is much easier to get approved. This keeps all of your vehicles on their optimal cycling points (link to last week) so that you maximize your trade-in value. Furthermore, a leasing program with a sound replacement plan, allows time to factory order a vehicle and get the exact features you need while paying less than what you would off a lot.
Depreciation: This is the largest expense associated with operating the vehicle. The key is to carefully capture the current operating costs for each vehicle so that you are able to plan for its exact optimal cycling point. Although this may seem like a pain, it will prevent any surprises that may come from diminished value or unexpected repairs.
Maintenance: If you carefully track maintenance costs you will be able to tell when acquisition of a new vehicle is less expensive than continual upkeep. Since we are in rough times many companies think that keeping their current vehicles will save them money. However, studies have shown that the money that goes into maintaining these vehicles could be applied to new vehicles for a cost savings.
Fuel: When fuel prices are low it is easy to forget how much of an expense this can really be. However, as gas prices continue to rise, it will be important to implement a good fuel management program. By carefully monitoring expenditures and mileage, it becomes easier to implement a program to save your company money. Many of our clients will see a savings of about 15% when they are willing to dedicate the time to this monitoring.
Although this may come off as a lot of time spent monitoring a fleet that you do not care about that much, the time will be well worth it. Once you are empowered with accurate information, you will be able to effectively manage your fleet.
Tags: automotive leasing, business leasing, commercial fleet, fleet management, fleet manager, Wisconsin
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How long should we keep our company vehicles?
Tuesday, January 19th, 2010
Everyday your employees use them to get to where they need to go. They hop in and turn the key with little thought as to what the vehicle is costing your company. However, as a business owner or fleet manager, you know that every mile that your employees put on is an added expense for you. So how do you keep the cost of company vehicles to a minimum?
The answer is extremely simple: optimal cycling. Although these words do not mean anything to you now, they should shortly. Often companies buy a vehicle and run it into the ground because they feel it is the most economic thing to do. A well structured lease program will actually guard against this and still provide you with all of the flexibility of ownership, plus you will be able to minimize the money you invest in your vehicle fleet, but more on that another day.
So, what is optimal cycling? Simply put it is figuring out the point in a vehicle’s life where maintenance costs are still low and your depreciated value and the market value of the vehicle are equal.
Let me back up for a second. When you drive a vehicle off of the lot you immediately loose market value, which is no surprise. From there market value will continue to plateau and drop over the life of the vehicle. Depreciation is similar but the loss in value happens gradually over time. However, maintenance costs start at relatively zero and then spike and rise over time. Below is a great slide that illustrates how these three values decrease or increase over time.
The idea behind optimal cycling is to find the exact point in a vehicle’s lifespan where all three values meet. This is the point in which keeping the vehicle any longer will require you to spend more money on maintenance then the vehicle is worth. Although you may think you are saving your company money by not buying a new vehicle, you are actually losing money that could come from the sale of the old vehicle and lease of a new vehicle that does not have the high cost of ownership.
To determine this point in a vehicle’s lifespan requires careful documentation of the vehicle’s history, as well as carefully track your maintenance expenses. The two key factors to determining a vehicle’s value are mileage and condition. By monitoring these on a consistent basis you are able to pinpoint, and plan for, the exact moment when you should get rid of the old car and bring in the new car. And although this may sound counterintuitive, sometimes a new vehicle is the best way for your company to save money.
Tags: automotive leasing, business leasing, commercial fleet, company car, company vehicle, fleet management, fleet manager, fleet vehicles, mayfair leasing, milwaukee, Wisconsin
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How to select the correct vehicle for your company
Friday, January 8th, 2010
How did you buy your last personal car? Did you buy it off the lot or have it built just for you? What made you decide on the model of vehicle that you selected? When you are looking to purchase a vehicle for your business, think about all of those things and then throw them out the window!
The fact of the matter is that buying a car for your company should be night and day from how you personally buy vehicles. Nine times out of ten when we buy a car for ourselves we rely heavily on emotion, however, if you do this for your business you will end up spending money that you need not. Instead, focus your decision around four key areas: fuel economy, safety, budget and image.
Fuel economy: When gas prices sky rocket this is usually the first thing that we think about. However, even with gas prices being relatively low, you still need to think about maximizing your fuel economy. Even if your vehicles require the carrying of a lot of equipment, you may be able to find a vehicle with a smaller engine or cargo area that will still satisfy your needs. We call this “right sizing” with our customers and it means finding a vehicle with the maximum fuel economy that will still meet your needs.
Safety: Obviously we want our employees to remain safe but what steps are you taking to ensuring this on the road? Is the vehicle you purchase ensuring their safety? For us, being in the Midwest, this often means finding a vehicle that can handle the brutal winter roads. This could also mean purchasing some extra safety features that may not come on the showroom floor model.
Budget: We often hear from clients that they want to buy the cheapest car they can find to meet their needs. This is all well and good but what will the upkeep, insurance and fuel costs be with that cheap vehicle? Often times people will spend more down the road (pun intended!) because they tried to save money upfront. Also, few fleet managers consider what the resale value of the vehicle they buy will be but this is direct money in or not in your hands! The key is finding a vehicle that will be the best value in the long run, not the lowest sticker price.
Image: This is where things get fun. What do you want your vehicles to say about your company when your employees pull in to meet a client? Do you want them to say that you are environmentally conscious, a high-end service provider or blue-collar worker? Every vehicle tells a story so it is important to know what you want that story to be and then figure out what vehicle will tell that story. Whether it is what model of vehicle your employees drive or a high-end graphics package, the look of your vehicle can be very important.
So, forget everything that you know about buying a vehicle and focus on these four criteria. When you do you will find a vehicle that is the best value for you today and down the road.
Tags: automotive leasing, business leasing, commercial fleet, fleet management, fleet vehicles, mayfair leasing, milwaukee, Wisconsin
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