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It should be noted that the automotive market has been one of the hardest hit sectors, and we can even speak of a historic drop in sales, since the delivery of new vehicles fell by 72.2% in March and 88.8% in April 2020.

Faced with the Covid 19 epidemic, companies must look for innovative solutions to maintain their activity. Even if the government has taken some drastic measures, especially for businesses, it is not the same as last March: many companies are maintaining their activity, and thus making use of their car fleet.

As a Fleet Manager, Purchasing Director or Finance Director, you are responsible for reducing the economic impact of your fleet. In this new and uncertain context, what are the initiatives to consider, what are your new challenges?

Unexpected premium increases

It's a crazy idea but we could try to find some reasons to be positive in this extraordinary health context...but what are they? Let's look at the glass as half full: who says confinement and teleworking means less people on the road, less traffic and probably less accidents! According to the ONISR, the desertion of the roads has drastically reduced the risk of serious traffic accidents: in October 2020, 199 people died on the roads compared to 257 in October 2019.

Let's recap: if the majority of your company's employees who use a vehicle for business purposes were telecommuting, your car fleet probably suffered less damage than usual. That means less money spent on repairs, and your boss will be happy!

BUT... Despite this unique context and better control of claims, most companies will see their insurance premium increase mechanically by 1.5% to 2% (for the lucky ones...) in 2021, which will not help your TCO, which is already well impacted by the latest tax reforms. If you thought you were benefiting from the "beneficial" effects of containment, you will have to identify other savings levers. So how can you really reduce your fleet costs and gain in efficiency?

New measures that can be considered to limit the consequences

1. Extend your contracts rather than renew them

As mentioned above, containment has greatly reduced business travel, resulting in much lower mileage for your vehicles. The driving laws can therefore be reviewed in order to reduce the rent and allow you to wait to have more visibility on your activity. In this context, it may be appropriate to extend your leasing contracts rather than renewing them, and to postpone your calls for tender. This will provide immediate savings and flexibility. According to the latest Nexus Communication survey, 65% of buyers see the crisis as an opportunity to reduce costs, 40% to increase efficiency and 37% to reduce the number of cars in the fleet.

TIP: Have you thought about analysing the mileage of your vehicles? You may find that some journeys deserve another means of transport, or that the car is no longer systematically recommended. This can reduce the fatigue rate of your employees and the risk of accidents.

2. Postponement of non-essential interviews

As the saying goes: "there are no small savings", so roll up your sleeves and get to work on the bottom of the drawer! Concentrate on the so-called "major" repairs, which are included in the manufacturer's maintenance plan, and if you can, postpone the repair of minor damage to vehicles that are still running well. This will give you more resources to use where they are most needed.

Of course, this is only a temporary measure in the very short term, as deferring repairs to your vehicles can have financial repercussions for the company, such as increased repair costs.

Don't let the repair of scratches or bumps (present on the sides of one out of five vehicles) or even poorly functioning headlights drag on for too long, even though this is one of the most important elements for the safety of your employee. It is therefore essential to regularly check your fleet. WeProov even offers this service remotely.

Posted on 
7/6/2021
  by
Mélanie from WeProov
Fleet Management

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