Fleets in focus: Countrywide Group

Within four years, Peter Jardine will have saved close to £10 million since becoming Countrywide Group fleet manager – cutting 12% from annual fleet spend.

But this isn’t the result of a 20-year slog towards fleet excellence; he joined the estate agent business just three years ago.

Some of the savings have already been realised; the rest will be phased in as many of the company’s 4,500 cars are replaced on newly-agreed terms.

Jardine joined Countrywide in October 2010, initially on a four-month secondment from Vauxhall.

Countrywide’s fleet manager had recently left and, as one of Vauxhall’s biggest customers, the manufacturer offered to transfer Jardine across as a short-term solution.

He immediately looked at the company’s fleet policy and recommended a number of small tweaks.

Countrywide was receptive from the start; so much so that by early 2011 it had offered Jardine the role full-time.

“Some of the changes were to the detriment of the driver; some were for the good of the driver,” Jardine tells Fleet News. “In the same way, some saved the company money, some cost it money.”

The black column firmly outweighed the red on the fleet balance sheet, though, after a number of initiatives that generated bigger manufacturer discounts, maintenance savings, lower end-of-contract bills, fewer excess pay-outs and improved in-life management of reallocated cars.

However, the first proposal was to offer non-essential drivers greater flexibility when choosing their car.

Countrywide didn’t allow them to spend any allowance on extras such as sat-navs; Jardine changed that. He also introduced a policy allowing them to trade up or down.

The move enhanced the deal for drivers, acting as a sweetener for the next decision: to charge them for accident damage.

“When I joined the business there were seven divisions with seven people setting their own policies,” Jardine says.

“Each one was doing it in a different way. I proposed a fair and consistent policy.”

He recommended charging drivers £100 for each incident; the business agreed. It was enough to make drivers consider their actions without being too large an amount that over-penalised them when they had an accident.

In the first year, the new policy saved Countrywide just under £63,000 from a combination of fewer incidents and the contributions from drivers.

Miscellaneous damage was the next issue to be tackled, forced on to the agenda by rising end-of-contract charges from leasing companies.

Jardine agreed a dilapidation rate with its leasing partners for each vehicle; anything above that is charged to the driver – unless they report it before the car is de-fleeted, in which case they are charged £100.

“If the damage is reported beforehand we can control the repair rather than get a large bill from the leasing company,” Jardine says.

He also set up a deal with Spirit Fleet Solutions to manage reallocations.

If a driver leaves the business – estate agents tend to have high attrition rates – their car is collected by Spirit which estimates any damage above BVRLA fair wear and tear rates.

The cost is charged back to the driver and the vehicle is repaired back to the level of fair wear and tear before it is passed on to the next user.

“That way we know what damage each driver is accountable for when they hand the vehicle back,” explains Jardine.

But how does the business recharge costs to an employee that has left the company? “We take a £500 retainer from their final salary and we have a six-week turnaround period to either make a deduction or credit the money back,” Jardine says.

“This is about in-life management of the car in a way that is fair to each driver because we know who is responsible for what damage.

“It’s also good for the business because the car gets a mechanical and safety check as well, so when it goes to the next driver we have complied with our duty of care obligations.”

In late 2011, Jardine undertook a review of Countrywide’s accident management scheme, inviting its incumbent leasing provider Leasedrive plus three others – two independent companies, one other leasing company – to tender.

Given his knowledge of accident management and claims handling (see career history, opposite), Jardine was looking for total transparency on cost.

He wanted to compare the cost of providing the service to Countrywide versus what the company paid for the service versus the level of rebates the accident management providers received on labour rates, paint and parts – insider knowledge that many are unaware of.

It resulted in a reduced labour rate and a profit share on the rebates, which saved £80,000 a year compared to the existing agreement.

“It’s about knowing the right questions to ask to get the right answers,” Jardine says.

Leasedrive retained the business – but not because it offered the cheapest deal.

“We could’ve saved another £50,000 if we had gone with one of the independents, but we also put all our maintenance and tyres through Leasedrive and we agreed a new deal here which saved us more money,” says Jardine.

The agreement saw Countrywide move to a pay-on-use contract for all maintenance and a fixed monthly fee per vehicle for tyres, which piggybacked a deal between Leasedrive and Kwik-Fit.

Pay-on-use maintenance alone saved around £20 per car per month compared to the fixed cost contract. In total, the new deal is saving the company £780,000 a year.

“We didn’t want to save more money by using an independent only to lose out on the maintenance deal,” Jardine adds.

Countrywide uses a panel of three leasing companies to fund its vehicle fleet on a four-year/60,000- or 80,000-mile operating cycle. But all cars are maintained by Leasedrive.

In this way it has a ‘best-of-both-worlds’ policy: competition between the three lenders reduces prices by 8-10% versus using just one lender, while putting all maintenance and accident management through Leasedrive ensures it receives high quality service and a full reporting service.

It’s the low price, high service combination that many fleets aspire to.

However, savings from the new accident management, maintenance and re-charge policies which nudge the £1 million mark, pale against the figure achieved when Jardine re-negotiated his contract with Vauxhall and invited other manufacturers to bid for his essential user fleet, which accounts for 3,500 drivers.

Vauxhall retained the contract; Countrywide increased its discounts. Over the lifecycle of the fleet, the savings will reach £3 million purely on the improved terms.

At the same time, Jardine reassessed the vehicles on the fleet. Historically it had a lot of petrol models because of the discount structure, but the new deal revolved around diesel.

A 130g/km cap was imposed; the like-for-like rental reductions, lower spend on SMR, corporation tax savings and reduced national insurance will save another £3.2 million, which will be phased across the four-year operating cycle.

Employees will also enjoy greatly reduced benefit-in-kind payments.

In addition to the essential user fleet, Jardine tackled the ‘free-choice’ drivers. When he joined, they were exactly that – free choice.

Most opted for a handful of manufacturers but the mix of Alfa Romeos, Saabs and other models meant the maintenance bill was costly.

Initially, choice was reduced to seven manufacturers; from January it will fall to four: Audi, BMW, Mini and Volkswagen.

The saving? Around £900,000 thanks to the improved terms from the selected manufacturers.

Employers that are not happy with the brands on offer can choose to take cash.

Around 800 already do, although half of those came with more recent business acquisitions and are not yet under Jardine’s control.

“Next year I will look to amalgamate all cash takers on to one policy,” he says.

“They will have to provide documents – V5, business-use insurance, MOT and service history – before they get the allowance. This is being managed from the top down.”

Jardine is also looking for further savings, including from the fleet of 100 cars on long-term rental.

Crunching the figures suggested it would be cheaper to contract hire the cars rather than rent; this is now being tested by leaving 50 cars on rental and switching the rest to contract hire.

“Our figures show that even though after each driver you have to bring the car back and refurbish it, contract hire is cheaper than long-term rental,” he says.

“Next year we will have the cost comparison to make the decision whether to change or not. If the figures match my assumptions, then we will change.”

One trump card remains in Jardine’s back pocket.

The replacement cycle moved from three years to four years in 2010, but he reassessed this last year and concluded that further savings on lease rate and, surprisingly, maintenance could be made by pushing it out further to five years, thanks in part to Vauxhall’s Lifetime Warranty.

“That’s a step too far at this stage given that we have only recently moved to four years,” Jardine says.

“But it remains an option if we need to reduce fleet costs even more.”

Jardine's career history

Peter Jardine’s career gave him the ideal background to be a fleet manager.

From school he joined Velo as a claims handler, moving on to handle total loss claims which included negotiating agreements with insurance companies.

Then he was appointed as an account manager at Aon, dealing with fleet managers’ accident management needs.

From there he moved to Vauxhall, heading its rental programme for four years before switching to rental sales.

When Countrywide’s fleet manager left in 2010, he was offered the chance to go to the business on secondment.

His skills in accident management, claims handling and man management, together with his knowledge of the inner workings of manufacturers gave him the perfect tools to drive an effective and efficient fleet policy.

Factfile

Organisation Countrywide Group
Group fleet manager Peter Jardine
Time in role two years, 10 months (full-time)
Fleet size 4,500 cars; 22 vans
Operating cycle 4yr/60k or 4yr/80k
Brands on fleet Essential users – Vauxhall (Corsa, Astra, Insignia); non-essential – Audi, BMW, Mini, Volkswagen