Small to medium sized fleets still see purchase price, or monthly rental, as more important than wholelife costs when choosing a vehicle, according to Arval's Corporate Vehicle Observatory report.
Cost is at the top of the agenda, although smaller and medium-sized businesses are interested in the purchase price (or lease rental of the vehicle) whereas the largest businesses take a more pragmatic view based on the total cost of ownership (TCO), also known as wholelife costs.
TCO means taking into account the full range of vehicle costs. This includes areas like depreciation, maintenance, fuel, insurance tax and administration.
It provides a much more accurate view of the cost of a vehicle to the business than the upfront costs in isolation.
Irrespective of the size of the company, it is important to effectively manage vehicle-related expense.
To do this, fleets should look at the full range of costs and adapt their approach in order to make the most cost-effective decisions.
Most small and medium-sized businesses, and an increasing number of large companies, don’t have a dedicated fleet manager and often don’t call upon the support of a leasing company.
This is definitely a contributing factor to the method that they take and shows how calling upon some fleet expertise, and getting solid practices in place, could save them money in the longer term.
Abner Maload - 17/10/2014 16:54
Interesting that actual cash in the bank (or what's left after buying/renting a car) is more important to small businesses than theoretical models of what a vehicle may or may not cost to run. Maybe big business could learn something from smaller fleets.