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Richard Hipkiss' blog - 17 October: Tackling the SME knowledge gap

Date: 17 October 2016

Leasing companies, brokers, dealers and fleet management companies are increasingly competing for SME customers, with differing propositions, sales tactics and services.

But while the SME fleet market presents a growth opportunity for industry providers, many business customers are left floundering in the dark as they attempt to navigate the supplier maze.

Stringent FCA regulations have vastly improved business practices but few SMEs employ specialist, full-time, fleet managers with the requisite fleet expertise or experience to ensure costs are optimised and that they receive appropriate value-added services.

Although low vehicle volumes within the SME sector have resulted in leasing providers focusing their core customer offerings upon lease and maintenance contracts, to the untrained eye, the relative value of such deals can still prove confusing.

Only with sole supply agreements are the doors typically opened to additional services, and in many cases the concessions are quite limited. Invariably however, even where such options are on the table, smaller businesses are unaware of what they should be looking for in the fleet supply chain and which services are likely to add real value.

Just a little knowledge however can go a long way, and can help save companies a great deal of money in the long term.

Only the Institute of Car Fleet Management currently offers independent training programmes for those whose job responsibilities include fleet. By asking a few simple questions of themselves and their prospective suppliers however, companies can put themselves on track to receive the right vehicles and fleet services at the right price.

At the outset, a clear and robust fleet policy should be in place that provides for good vehicle choice and low total cost of ownership.

Total cost of ownership calculations offer a far more meaningful and cost-effective method of evaluating and selecting vehicles than headline lease rental prices. TCO should consequently be requested from the supplier, be factored into the company's vehicle grade structure and should be applied consistently for all employees.

The company should then formulate a checklist of the key services it needs to effectively support its fleet, including everything from an intuitive car configurator to wider fleet consultancy. If a broker is the preferred option, these requirements must be clearly communicated.

If all eggs are being put in one basket, with a leasing company or dealer the preferred option, the company should check to ensure all essential, value-add, services are available from the supplier to meet both current and future needs.

By taking these few simple steps, businesses can help protect their bottom line and put themselves in the fast lane to greater fleet efficiency.