Fleet managers could be forgiven for thinking their world is falling apart.

The current economic climate is challenging businesses across the globe and there are so many different factors impacting on the way fleets are run.

Fleet managers have to contend with:

  • Volatility in fuel pricing – rates at the pump have fluctuated between 30% and 40% in the past six to nine months alone.
  • Plummeting residual values – it’s no secret that holding costs in the daily rental, leasing and contract hire industries have increased and, more importantly, continue to do so. The gap between transaction price and residual value continues to widen.
  • Funding – it is always difficult to know whether you have achieved the best deal, but with so much uncertainty around even greater care needs to be taken when choosing partners.

Given the circumstances, businesses can no longer assume that standard procurement measures – such as risk purchase, contract hire or leasing – are appropriate.

The solution to navigating through the minefield that is fleet management could be flexibility.

Rental providers are constantly being challenged by customers to present an innovative, flexible rental programme that negates the need for clients to negotiate an unstable market.

The objectives clients set are generally very similar:

  • They do not want to struggle with three-year fleet planning, particularly where restructuring is a possibility.
  • They do not want risk – more and more companies are becoming risk averse.
  • They need to present immediate and flexible solutions to stakeholders internally.

Car rental companies can be the fleet managers’ ally in situations such as these.

They provide vehicles at a moment’s notice and, for the most part, require little or no commitment after the first month.

The benefits of a symbiotic relationship are manifest: fleet managers can react quickly and move with market conditions.

This allows their business to develop new strategies that do not require any form of commitment of the type they may have made in the recent, more stable times.

In addition, when staff morale can be adversely affected, a new car every six months can be a real incentive.

From a rental company’s perspective, flexible medium-term hire is utopian in that it allows them to effectively plan their own acquisition strategy, they can assume relatively strong utilisation levels and cash flow.

As a result, the deals they are able to provide are often not un-like those a fleet manager might expect from a three-year lease.