Ve­hi­cle Ac­qui­si­tion

Is there a bet­ter time than any other to add to your ve­hi­cle fleet?

New Zealand Company Vehicle - - CONTENTS -

The an­swer is Yes – when­ever the ex­ist­ing fleet gets too old, too tired or too high in mileage and be­comes a ma­jor li­a­bil­ity. Which is all well and good if you are in the happy po­si­tion of hav­ing a fleet man­ager or out­sourced agency mon­i­tor­ing the sta­tus of your fleet, but if not, well then it comes down to some­body at the top mak­ing the call – that’s prob­a­bly you. For this rea­son, so many New Zealand busi­nesses subscribe to the idea of out­sourced fleet man­age­ment; even if you are one such com­pany, you may find this ar­ti­cle a lit­tle thought pro­vok­ing. We are talk­ing about the dark art of bring­ing ve­hi­cles into your busi­ness as­set list and get­ting rid of those that are more ex­pen­sive than you might think to keep on the books; and dark art cer­tainly sum­marises the sci­ence well. There is quite a lot to take on­board when it comes to ac­quir­ing ve­hi­cles, but most of you aren’t druids with the abil­ity to draw on eons of re­search in musty old halls, so, grab a cof­fee, and we’ll try to break it down for you. From a Green­fields perspective, right now is a re­ally good time to start adding to your fleet. No re­ally, the best time is right now. We’re nearly at the end of the year, so the new prod­uct is al­ready mostly here – this means a lot of near new prod­uct still around has to be got gone – prefer­ably by yes­ter­day – so deal­ers are likely to be quite ac­com­mo­dat­ing when it comes to price re­duc­tions. Of course, this means you are go­ing to be look­ing at not-quite-new, which a great many busi­nesses will find an at­trac­tive propo­si­tion, but be­fore you start bounc­ing into your lo­cal deal­er­ship, cheque­book in hand, you might want to think about the far dis­tant fu­ture and re­sale-abil­ity – par­tic­u­larly if the late model ve­hi­cle you are look­ing at al­ready has its next gen re­place­ment here. First, you prob­a­bly won’t get the fully re­al­is­able fi­nan­cial life ex­pectancy out of your bar­gain-priced run-out and sec­ond, when you try to dis­pose of it, there may be more sim­i­lar ve­hi­cles out there than you think, which is go­ing to hurt as well as make it dif­fi­cult to move the fleet along. Those rea­sons alone should be enough to make you sit up and pay at­ten­tion to the mer­its of in­ves­ti­gat­ing a lit­tle be­yond the onemodel-back from the lat­est of­fer­ing from your favourite brand. So, you have to know your onions as they say, which means re­search. Look­ing into your fleet though, par­tic­u­larly when it comes to ac­quir­ing ve­hi­cles, is ac­tu­ally a very de­tailed and time-con­sum­ing process, which is why many put it into the ‘’too hard’’ bas­ket and let the new breed of lease com­pany do the hard yards in this re­spect. Smart busi­ness prac­tice sug­gests you be proac­tive when it comes to your deal­ings with your lease com­pany, which means you’ll need at least a pass­ing in­ter­est in what’s go­ing on. If you don’t have this, em­ploy some­one who does. For in­stance, with the rise and rise of the elec­tric/plug in hy­brid/bat­tery hy­brid ve­hi­cle and the ris­ing cost of fuel, you might want to ask your fleet provider about the pos­si­bil­ity of an al­ter­na­tively-pow­ered ve­hi­cle. If so, you are go­ing to have to be mind­ful of your tim­ing too, as most deal­er­ships will have

to go back to their par­ent dis­trib­u­tor for an or­der of any­thing over three elec­tric ve­hi­cles. If you need 15 or more EVS ur­gently, you may not have the op­tion of look­ing at elec­tric ve­hi­cles un­less you have a good work­ing re­la­tion­ship with a dis­trib­u­tor. What about diesel then? There’s plenty of avail­able op­tions and it’s cheap at the pump, right? There’s plenty of ways to save there. Yes, it is and yes there are, but does your fleet jus­tify the ad­di­tional cost of road user charges and more ex­pen­sive ser­vic­ing? Typ­i­cally, it’s un­der­stood that for a diesel to pay its way, your ve­hi­cles are go­ing to be do­ing some­thing in ex­cess of 50,000kms a year to be cost ef­fec­tive. And let’s not for­get your driv­ers. They may not ap­pre­ci­ate hav­ing a diesel as much as your CFO might and – while it’s not an issue now – you should be ask­ing yourself if a diesel is go­ing to be re­saleable down the track? Why wouldn’t it be? His­tor­i­cally, we fol­low Euro­pean trends and right now Europe is not a big fan of diesel, es­pe­cially in cars. This means you’ll save on fuel now yes, but will those at the pump sav­ings work out when a high km oil-burner is ready to be moved along? Not want­ing to be a doom­sayer, but this line of think­ing just serves to alert you to how much deep con­sid­er­a­tion you could or should be look­ing at when it comes to adding to your fleet. Then there’s the ques­tion of where do the ve­hi­cles come from? Let’s face it, in New Zealand, there are plenty of op­tions: deal­ers, dis­trib­u­tors, whole­salers or auc­tion houses. And let’s not open up the royal can of worms that is the used ve­hi­cle mar­ket. That’s a sub-sci­ence in it­self, though it ap­pears to be an easy op­tion on the sur­face. But look­ing at the pri­mary buy­ing mar­ket op­tions; which is the best bet for your

or­gan­i­sa­tion? You can start by de­ter­min­ing how many ve­hi­cles and of what type, you’ll be buy­ing. For multi-ve­hi­cle, multi-brand fleet buys, auc­tion houses may be the way to go, as­sum­ing you have the time. Re­mem­ber too, if your fleet re­quires ac­ces­sory fitout – and most would con­sid­er­ing the by-theshort-and-curlies hold OSH has put on fleet op­er­a­tions – you’ll need to make sure your fitouts are com­pat­i­ble with the va­ri­ety of ve­hi­cles you may end up with. If you are go­ing to go auc­tion shop­ping – and you will get some mean deals on trans­ac­tional pric­ing – you re­ally will have to do your home­work for known ser­vice is­sues, re­call his­tory, ser­vice his­tory and how easy it is go­ing to be to keep up a main­te­nance sched­ule in terms of parts avail­abil­ity at the very least. You’ll need to re­search quite heav­ily, though you’ll def­i­nitely have con­trol of what you buy, but caveatemp­tor – let the buyer be­ware – ap­plies most strongly here. Tra­di­tional deal­er­ships may of­fer you bet­ter terms when it comes to fi­nance on the cars, and while you may not need a mag­ni­fy­ing glass any­more to read the ‘trans­par­ent’ fine print, don’t get bull­dozed into mak­ing a ‘buy now’ de­ci­sion. Take your time, com­pare ap­ples for ap­ples when it comes to fi­nan­cial com­mit­ments and don’t for­get to ask about to­tal cost of own­er­ship fig­ures – how much the ve­hi­cle will cost from cra­dle to grave with all ser­vic­ing and main­te­nance fig­ures worked in, prefer­ably from a third party or an­other in­de­pen­dent source. Com­mer­cial spe­cial­ist deal­ers would be the best go to for any­thing to do with buy­ing/leas­ing or oth­er­wise ac­quir­ing their more spe­cialised prod­uct. Light com­mer­cial ve­hi­cles are not the same as buy­ing cars only big­ger. There is plenty to con­sider that you like as not have not even thought of. An ex­am­ple? OK, Empty van weight com­pared with fully laden van weight. Do you need to fac­tor in dual rear wheels given the cargo you may be car­ry­ing or the ad­di­tional weight of equip­ment you have on­board? What about driver li­cens­ing? When a big van is fully loaded, tech­ni­cally it could

be­come a Class 2 and if your driver doesn’t have that lit­tle en­dorse­ment and the worst case hap­pens – an ac­ci­dent – don’t ex­pect sym­pa­thy from your in­surer or OSH or even nec­es­sar­ily ACC. And you bought the van, so it will be­come your prob­lem. Un­less you – as the pro tem fleet ac­qui­si­tion per­son – drive a van by per­sonal choice as a daily com­muter, it’s def­i­nitely smart to talk with a com­mer­cial spe­cial­ist. A ve­hi­cle dis­trib­u­tor – as­sum­ing you can talk to one di­rectly – will likely best look af­ter your bulk ve­hi­cle needs and dis­count con­sid­er­a­tions, as­sum­ing the num­bers of ve­hi­cles stack up to make the con­ver­sa­tion a worth­while one for the dis­trib­u­tor. You’ll get bet­ter guid­ance on your ve­hi­cle se­lec­tion from the brand’s range too. So yes, there’s a lot to con­sider when ac­quir­ing ve­hi­cles for your fleet, but the key to it all is in­for­ma­tion first and fore­most. While a third, a third, a third or one per­cent fi­nance deals sound great, there may be other as­pects to con­sider. Would a lease pack­age work out to be a bet­ter bet? Taken holistically, with the ad­di­tional ser­vices of­fered by leas­ing com­pa­nies, which ul­ti­mately make fleet man­age­ment a less oner­ous task than it would be with­out, maybe leas­ing is the bet­ter op­tion. It makes sense then to do your home­work, get as much in­for­ma­tion from as many sources as pos­si­ble and keep an eye on the end game re­sult, which in terms of fleet ve­hi­cles is about three to four years or 100,000kms for sales ve­hi­cles and four to five years or 160,000kms com­mer­cials. For most com­pa­nies a fleet ve­hi­cle is lit­tle more than a de­pre­ci­at­ing as­set. Smart busi­ness sense would be to min­imise the im­pact any de­pre­ci­at­ing as­sets are go­ing to have on your ul­ti­mate bot­tom line.

Newspapers in English

Newspapers from New Zealand

© PressReader. All rights reserved.