As your business grows, you may begin to deliver more products, schlep more equipment, or hire new salespeople to meet with more clients. When your business vehicle needs increase, you’ll find cost savings if you buy all your vehicles at once, from one source. In the automotive industry, this is known as fleet purchasing.
Fleets Big and Small
In the past you typically had to purchase at least 10 vehicles at once to qualify for fleet discounts. In recent years, however, some dealers have begun offering more flexible fleet programs; so investigate fleet purchasing even if you’re looking to buy just three or four cars. If you need several different types of vehicles, you may have a harder time qualifying for fleet pricing, as most fleet programs revolve around a company’s purchase of many units of a single vehicle model.
Many major manufacturers offer fleet purchasing programs, including Ford, General Motors, and Nissan. Some makers refer buyers to local fleet specialists for details on their fleet programs, while others may post details of their fleet offers on their Web sites.
Some makers limit the types of vehicles that can be purchased in fleet-buying bargain deals. Shop around and compare offers before making a purchasing decision, weighing carefully the types of vehicles that will serve your company best.
Many companies lease their fleet vehicles instead of buying them. If you plan to do this, research lease offers in detail to make sure you understand how the leases work and what your options are when the leases are up. Some manufacturers offer assistance in reselling fleet vehicles after leases end, a valuable perk that can help keep your company from getting stuck with a garage full of older vehicles several years down the road.
Pros and Cons
Buying a fleet of vehicles for your business may sound exciting, but it comes with substantial expense. Besides the cost of buying or leasing the vehicles, consider how you will keep the autos running and in good repair. You’ll probably need to either put an existing employee in charge of fleet operations or hire a fleet manager to take care of regular maintenance, cleaning, and repairs on your vehicles. Be sure to figure this into the cost of your fleet-acquisition project.
Weigh the cost of acquiring the vehicles through purchase or lease versus allowing employees to use rental cars if they drive more occasionally. You may also incur a cost for storing all of your vehicles in a secure location. The company will also need to insure all the vehicles to protect itself from accident liability that could otherwise wipe out the company’s resources. Carefully evaluate whether your business truly has a volume of driving that justifies all the costs of having your own fleet.
On the plus side, having fleet cars on hand is a convenience for employees, who may consider it a perk to be able to pick up a car in the company lot instead of having to trudge down to a rental agency. Another positive: You can put your company logo on all the cars, creating a rolling advertising campaign that may help build your brand recognition and enable you to reach new customers. With employees driving identical models, the vehicles can help create an identity for your company in your key markets.
Business reporter Carol Tice contributes to several national and regional business publications.