Let policy set rental choice, not the driver

Results from the Fleet News Confidence survey highlighted the growing concern among fleet operators about the spiralling cost of daily rentals.

Many fleet managers are reviewing rental spend in an effort to reduce the overall cost of their fleet, but are they doing enough to ensure they maximise the full potential of what should be an effective complement to their existing leased vehicles?

Daily rental offers companies a flexible alternative to the pool car, making vehicles available to staff according to their varying needs without sitting as a depreciating asset on the company’s books or attracting service and maintenance expenses.

So if rental is such a convenient and cost-effective option, what suddenly seems to be going wrong?

With employee benefits squeezed in the current economic climate, suspicions seem to be forming among fleet managers that staff see the rental car as a temporary perk which they now have an opportunity to exploit.

Given freedom of choice from the rental list, staff may be inclined to pick vehicles with more powerful engines than they are used to, or a higher grade of vehicle with a luxurious specification.

A smaller, fuel-efficient car might be more than adequate to fulfil the requirements of that particular journey, but without any monitoring of the rental process in place, this level of excess is likely to go undetected, especially in larger organisations.

Additionally, either through a lack of time or understanding about the costs involved in daily rental hire, employees will often order cars far sooner than they need to be delivered or end up keeping them for longer than their actual business need dictates.

Perhaps they are even using multiple suppliers?

Often employees will arrange for delivery of a hire car the night before it is required for peace of mind or for the sake of convenience; but sometimes this can manifest itself in
a Monday morning hire being delivered on Friday afternoon.

This expense, while understandable from a layman, would be unforgivable in a managed environment.

Fleet managers know this type of hire behaviour is costing them money, but with continual pressures to improve the strategic performance of their fleet, many simply don’t have the capacity to bring this situation under control.

An effective first step towards reducing costs is to look at changing or consolidating rental requirements to one supplier.

Many firms have stuck with the same rental provider simply because it is perceived as more difficult and costly to source an alternative.

But by dealing directly with the rental provider, companies could leave themselves open to more substantial costs in the long term.

The key cost-saving issue for most businesses lies in moving rental choice from a driver-based decision to a policy-driven one.

Outsourcing the management of rental needs to an intermediary such as a leasing provider helps redress the balance and put the control back into the hands of the fleet manager.

A good leasing provider will undertake a complete audit of the company’s rental requirements.

Its rentals team will assess exactly which staff need rental vehicles and for what reason, which then allows them to respond quickly and appropriately to each request.

By ensuring each rental experience is specifically tailored to the individual driver, the managed solution can not only reduce wasteful hire charges but minimise driver downtime and help businesses get the most out of their workforce on the road.

Allowing a leasing provider to manage the company’s rental programme alongside the existing leased fleet means that the two services can act as a cost-efficient complement to each other.

Of course, using an intermediary attracts a management fee, but in terms of the overall cost savings achievable, with minimum input from the fleet manager, the long-term value to the company could be priceless.

How to get the best from daily rental hire

Make sure you ask the following questions to analyse your company’s rental needs: