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Limiting Loss: Protect Your Assets

Autosphere » Fleet » Limiting Loss: Protect Your Assets
Fleet managers must be proactive in order to assure that their assets maintain their value as much as possible. Photo Adobe Stock

These common sense suggestions will allow the fleet manager to stretch the useful life of their vehicles, as well as limit costs.

Many fleets are holding on to their existing assets much longer than they had ever anticipated would be necessary. While we all had hoped that supply chain issues, along with parts shortages, would have worked themselves out by now, it’s starting to look like things might not get back to some kind of normal until the end of 2023 or even 2024.

In the meantime, as the months and years go by, and as fleet vehicles rack up the miles with every passing day, fleet managers must be proactive in order to assure that these assets maintain their value, as much as possible, until they can be sold and replaced.

Depending on how your vehicles are used, it might be smart to start thinking about ways to prevent damage and limit wear and tear. “Where it makes sense, some fleets are installing cargo mats or seat covers,” says Romy Bria, Vice President, Client Relations at Holman. “If they’re work vehicles, you can mitigate some of the wear and tear to the interior to make it last a bit longer.”

Preventing damage will assure that you can still get top dollar for those vehicles at auction because they’ll still look good and well-cared-for.

Beyond maintenance

Much has been said about the importance of maintenance. Logically, a well-maintained vehicle will last longer and break down less frequently. However, in order to maximize the value of a vehicle at remarketing time, a fleet manager should keep accurate maintenance records for all their vehicles.

“Having those records available, and being able to show that your vehicles were properly maintained so that the buyer knows that preventive maintenance was done on time is certainly a big plus when it comes to selling vehicles to either consumers or even tradespeople looking to pick up a truck for their business,” Bria adds.

He explains that as long as the resale market remains favourable, not having a complete history of maintenance records is likely not a deal breaker, since the demand for vehicles is so high. But once supply and demand get back into a more normal balance, older vehicles with thorough maintenance records will be preferred over older vehicles with a mysterious maintenance history.

Beyond a better resale value, according to Rob Ellsworth, Project Manager, Business Intelligence & Analytics at Holman proper maintenance is essential to not only extending the life of a vehicle but also limiting expenses in the long run.

“It’s not just a matter of maintaining a vehicle,” Ellsworth said, “but doing so on time. If you’ve got a service every 10,000 km, for instance, and you didn’t get it done till 18,000 kilometres, those are the types of vehicles where we see operating costs increase by as much as 30%.”

So preventive maintenance, when done on time, is a money saver. “Maintenance lowers costs and increases uptime, so it’s a win-win for the client,” Ellsworth adds. “It also eliminates a lot of the catastrophic failures, as well as engine, transmission and drivetrain issues.”

Bringing a vehicle in for service regularly allows the technician working on it to spot any problems early before they become an expensive issue. “Regular maintenance at a full-service repair facility can identify a problem before it happens and address it so that you don’t have that unexpected breakdown, which we know comes with rental costs along with towing costs, and all these other expenses that just add up,” Ellsworth says.

Warranty coverage

Another reason why you’ll want to bring your vehicles in for maintenance on time, as well as document each visit, is to assure that you’ll be able to take advantage of any manufacturer warranties if anything breaks down.

“If you don’t have a maintenance history, and you can’t document what was done, if you have a failure, those warranties may not be applicable,” explains Gerry Corcoran, National Director, Commercial Remarketing Services with Jim Pattison Lease.

Corcoran says he’s heard of cases where an engine failed at 80,000 km, the owner thought it would be covered by warranty, but then it was discovered that the oil had only been changed twice during the life of the vehicle.

“If you or your drivers don’t follow the maintenance schedule, and you don’t make sure everything is done on time, it’s going to cost you a lot of money in the end,” Corcoran adds. “When we make a claim with one of the manufacturers and tell them that there’s been an engine failure, for example, they know that they don’t have failures with that particular engine, unless it wasn’t properly maintained.”

Telematics

Claudio De Angelis, Remarketing Manager at Foss National Leasing recommends taking advantage of telematics. “A lot of people, if they know telematics is in their vehicle, will drive a little bit better,” he explains. “So typically, they’re not going to be as harsh on the vehicle, and that will reduce the need for some maintenance visits and repairs.”

Telematics will also allow management to keep an eye on vehicle vitals so that problems can be addressed as quickly as possible, which will help extend the life of the vehicle, as well as avoid expensive repairs.

“If a warning light goes on,” De Angelis adds, “then you’re notified right away and the matter isn’t forgotten. It can be addressed right away and the driver can’t reason that they’ll ‘get to it tomorrow.’ Leave it too long and what could have been a small repair turns into a new engine.”

Shuffling the fleet

De Angelis says that some of his customers are shuffling vehicles within their fleets. In other words, a vehicle that typically drives more kilometres on its daily route might be switched with one that doesn’t drive as much, thereby balancing use between the two vehicles.

Also, when new vehicles are added to the fleet, they should be allocated to routes, or to individuals, who have racked up more kilometres vs. those with less. De Angelis warns that this might be easier said than done in some cases. “It’s typically easier with service-based fleets,” he admits, “but when you’re dealing with vehicles driven by sales staff, for example, you’ll have drivers who will wonder, ‘Why is that guy getting the vehicle I was supposed to get?'”

Until the balance between supply and demand for new vehicles is restored, a common sense approach will allow fleet managers to control expenses while keeping their current assets on the road for as long as necessary.

 

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