Businesses consider fleet outsourcing to cut costs

Business interest in outsourcing fleet operations is on the rise as companies consider their bottom line and the impact of Covid-19, according to LeasePlan.

The vehicle leasing giant says companies are leaving no stone unturned in an effort to operate more sustainably post coronavirus.

Matthew Walters, head of consultancy and customer data services at LeasePlan UK, told Fleet News that “many businesses” were “increasingly interested in the efficiency savings gained by outsourcing their operations and fleet activity”.

It also reports contract extensions have increased by 50%, during the coronavirus crisis, while other providers say early terminations of company car contracts are on the rise, highlighting the pressures faced by fleet operators.

Alphabet has reported an increase in early terminations and reschedule requests in recent months, driven predominantly by individual and SME customers.

However, Gavin Davies, Alphabet’s general manager for customer relationship management and public sector, said: “We are seeing bulk early termination requests from some of our corporate fleets as well, but they are also utilising other options too, such as putting new car orders on hold while they assess their individual situations and future fleet needs.

“This has been the case particularly in those industries that have been hit hardest by the lockdown or still have staff on furlough.”

He added: “As the furlough scheme has given an artificial stimulus to current demand, we do expect to see an increase in early terminations as the scheme comes to an end in October.”

READ THE LATEST ON THE STATE OF THE COMPANY CAR MARKET IN THIS MONTH’S DIGITAL EDITION OF FLEET NEWS

Three-quarters (74.8%) of fleets told Fleet News in a recent survey that they expect greater use of video conferencing in the long term, while almost 61% expect to see average mileages fall and more than a third (35.8%) said that they expect to be running fewer company cars in the future. 

Fleet News is asking fleets again to update us on their operations in a short survey to help inform the wider industry of some of the challenges faced.

Walters said: “Working from home over the last five months has meant fleet managers are now evaluating their fleet sizes, mileage needs and whether some, or parts of their fleets, are still business critical, or if they’ve fallen into the perk category.

“At LeasePlan, demand hasn’t decreased, but it has instead changed. We have found that demand has shifted to become more heavily influenced by desire, cost effectiveness and EV requirements and schemes.”

LeasePlan also says it’s preparing for Brexit. “We are planning for and expecting further challenges for the sector, particularly with the UK’s exit from the European Union," explained Walters.

“We continue to work closely with our customers to support them throughout this transition and to minimise the disruption this has on the organisation and its employees.”