5 reasons why businesses are avoiding Fleet Management

Fleet Management remains one of the most difficult activities for any organisation with many vehicles. Managing fleet generally includes vehicle financing, maintenance, tracking and diagnostics, as well as driver management, speed management, fuel management and health and safety management.

Europcar Business Fleet Services has been investigating the area of fleet management. Grey Fleet is not the answer, but neither necessarily is investing in fleet management internally. Europcar Business Fleet Services offer an alternative to leasing, grey fleets and ownership that straddles a middle ground that will suit some business.

Here are reasons why companies are avoiding getting their own fleet and would rather settle for grey fleet instead:

        • Storage cost
        • Too much capital
        • Too little time
        • Telematics technology
        • Company branding

1. Storage cost

Aside from purchasing the fleet, companies also need to find a suitable location for safe storage. This endeavours has been proven to be really frustrating for businesses. Providing storage facility for fleet of vehicles can eat up a lot capital and this can really deflate the notion of having a fleet.

Business that has not considered this additional cost learn really quickly that owning a fleet requires more cost than expected. Even when these vehicles are leased, business will still be required to store the vehicles

The question is is your business ready for this additional cost?

2. Too much capital

Having a fleet of vehicles in the warehouse will definitely tie down company's capital this can significantly hinder growth in order divisions especially now that we are in an economy that requires businesses to be nimble. As a business, you need to decide which area of your business requires more of your limited budget. This has been found to be one of the major reason why companies do not go on fleet. And this is due to the fact that they believe that leasing cars and vans was is the only option when it comes security their mobility needs.

3. Too little time

As a business you want to get things running as soon as possible and trying to secure the best vehicles at the best prices out there can be tough going. Striking the right deal can be painstaking - even after finding the right supplier, agreeing on the right price is another matter. You are best served using a provider that already has this covered while you focus on other business activities.

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Most businesses will give up with the thought of going through the process before even starting because the logistics alone can be too much for small to medium businesses to cope with.

4. Telematics technology

Fleet Telematics return on investment can be difficult to quantify immediately, but it can provide solutions and a detailed insight into the performance of fleets across the company. Activities like vehicle reallocation decision can be made accurately in real time.

Though these advantages have been stressed, investing in the technology to facilitate such activities can be costly.

Telematics has been talked about as the fastest growing technology - meaning the cost of acquisition will likely be high.

However, Telematics will be the future of remote communication and its capabilities are only just being realised. The data from Telematics will provide tremendous cost savings on fuel, safety, labour, and vehicle maintenance expenses.

5. Company branding

Compounding the burden of acquiring and securing the vehicles, is the company’s need to further spend on wrapping them. Research has shown that for a brand to be memorable, it needs to consistently deliver its marketing message. Although, Vehicle wrapping and vehicle graphics are a proven means of strengthening business identity and giving the business a distinctive image.

It will cost the business more than initially thought in ensuring the purchase of the fleet not only solves mobility issues, but also serves as a marketing tool.

When businesses are confronted with all these cost decisions, it’s little wonder they decide to take the grey fleet route. Because at least it will not require the company to fork out so much capital upfront.

However, Europcar Business Fleet Services has largely removed such inconveniences. Now your company can work directly with us to handle all maintenance needs, and have the guarantee of a quick and seamless substitution process should your vehicle falter.