The automotive market has been in an upheaval over the last few years, and one of the biggest issues has been vehicle recalls. These recalls have significantly impacted manufacturers, supplies, customers, fleet managers, and more, and they aren’t slowing down.
Let’s look at how vehicle recalls could affect your business and what your options are moving forward.
Vehicle recalls can happen to any manufacturer and for any number of reasons. And when cars are recalled, it’s frustrating for drivers, car lots, and company fleets alike. Here are some of the biggest vehicle recalls from the last decade.
The range of issues in these vehicle recalls highlights why companies must stay informed on active recalls and recall-related issues. By monitoring recalls and potential issues as they arise, you can prevent bigger issues while maintaining company operations and reputation.
You never want to worry about the cars in your fleet. But, as demonstrated above, recalls happen across brands and at unexpected times. If you catch a glimpse of a headline or hear something on the radio that alarms you, you can always check. Just visit the National Highway Traffic Safety Administration here to see if your vehicles are in active recall.
Vehicle recalls can affect your company in several ways. This will vary based on your vehicle program. From mileage reimbursement to company-provided vehicle programs, the impacts range from minimal to incredibly challenging. Here are some of the impacts your company could face from vehicle recalls.
If your drivers use their own vehicles and are compensated through a reimbursement program, vehicle recalls can be problematic. Employees may be able to acquire rental cars from their local dealership in case vehicle recalls. If not, your company might offer rental cars so the repair does not impact business. When offering replacement vehicles during a vehicle recall, consider the following:
Vehicle recalls pose a significantly higher threat to businesses with company-provided vehicle programs. If most of your fleet vehicles are the same make and model, business might come to a stand still if those vehicles are recalled. Scrambling to replace a fleet of vehicles will be a costly logistical nightmare. Your business may struggle to meet demand, and customer satisfaction might also take a hit.
It’s important to have a contingency plan if you’re ever faced with mass recalls. A good plan will help limit downtime, prevent service disruption and reduce surprise costs.
To help limit the potential effects of vehicle recalls on your business, it’s important to have a plan for dealing with recalls quickly and efficiently.
In certain instances, fleet vehicles can benefit companies. They ensure the company provides the type of vehicle that employees need to meet their responsibilities. They allow companies to choose how much to invest in the technology and safety features. Fleet vehicles also provide a level of continuity: people may know a brand by the vehicles their employees drive.
These positives sound great, right? But after the initial investment and continual maintenance, recalls may impact your fleet. Chip shortages disrupted new vehicles hitting car lots which resulted in waiting lists for new vehicles. Strikes in the automotive industry can also impact the fleet vehicle supply chain, delay vehicle deliveries and fleet operations.
As we mentioned above, there are times where fleet vehicles can benefit a company’s needs to be effective. That doesn’t mean every company is a good fit for the program.
While companies with a mileage reimbursement program may not be impacted as severely by a recall, companies with fleet programs aren’t so lucky. For that reason, businesses with fleets must prevent recall-related issues when possible. To best mitigate potential risks, companies can:
But, at the end of the day, there are only three paths to dealing with potential fleet vehicle recalls.
Taking this approach means changing nothing. Your fleet vehicles don’t have active recalls and you aren’t experiencing recall-related issues. But past and current vehicle performance doesn’t guarantee future performance. Issues may develop at anytime. You might save costs by not changing your fleet for now, but you should save up for any future recalls.
Instead of having all your vehicles be the same make and model, try purchasing similar vehicles from different manufacturers. This approach could help minimize the impact of vehicles recalled since the whole fleet won’t be affected. Before making purchases, research different vehicles to find the ones with the best reliability and safety records.
Vehicle prices and maintenance costs continue to rise, making fleet management an increasingly costly venture. To mitigate the expenses of running and maintaining a fleet, consider alternative vehicle programs. The best option would be to switch to a vehicle reimbursement program like FAVR, with drivers using their own cars. This approach relieves you of the financial burden of vehicle ownership and maintenance, making it a better choice.
Since the beginning of the COVID pandemic, the need for vehicles is still present. Rental vehicles continue to saturate the used vehicle market. When it comes time to sell old vehicles and purchase new ones, you may not see the return of investment in the resale value.
Whether you decide to keep business as usual, diversify your fleet or switch to a vehicle reimbursement program, there is much to consider here. The best step you can take moving forward is educating yourself. To make an informed decision regarding vehicle recalls for your company, you should:
If leaving a fleet for an alternative program is right for you, develop a plan for approaching this change. Feel free to reach out to our team to get started! If you’re not quite ready for that, we get it. At Motus, we want you to feel empowered and informed about every aspect of your business. That’s why we’ve created a guide to help you learn more about transitioning out a fleet if that’s what you want.