BUSINESSCAR ROUND TABLE: New Years' thrift - fleet experts talk whole-life costs
Date:
17 February 2014
How important are whole-life costs?
BusinessCar editor Paul Barker kicked off the session by asking attendees how important they thought whole-life costs were to fleets.
KeeResources' Mark Jowsey described them as "crucial". "I'm a fleet guy and I was a user of our [KeeResources'] software before I joined the operation. When I came into our organisation some years ago it was with a mind set that it's extremely important to make purchasing fleet decisions based on more criteria than just invoice price or, in the case of contract hire, monthly rental.
"And that still applies today. Whole-life cost is, in my mind, a crucial tool. You can apply the same to private individuals as well. That said, although I think whole-life cost is important, it has to be balanced with the other criteria that are important to the business."
Lex Autolease's Chris Chandler argued that the majority of a fleet's running costs fall outside the lease or purchase price: "More and more costs associated to company cars lie outside the rental rate, so a pure list-price solution isn't much of a solution these days.
"Whole-life costs are the key to be able to a) control costs and b) de-risk choice lists. Lots of people are automatically selecting low-emissions vehicles, but you do get people who want something different.
"People understand the concept [of whole-life costs], but where the understanding is lacking is where you act. Create a policy, and where you actually get the savings is on the choice list."
Kwik-Fit's Martin Towers agreed that a lack of understanding in this area was the biggest problem for businesses: "All fleets start out with this wonderful idea of buying the best, but somewhere along the line that gets lost. They go back to buying the way they used to. We need to get that understanding [of whole-life costs]."
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