When To Replace Fleet Vehicles: Challenges of the Company Car Program

Your company has a fleet of vehicles your team has made regular use of. You might even go as far as to say they’re an essential part of your business. But, as with anything, they have a lifecycle. Having trouble determining when to replace fleet vehicles? Or what to replace them with? Here are some questions to consider when going through the process.  

Lease or Own? 

Whether your company has purchased the vehicles outright or simply lease them is a big determinant. Leased vehicles can be returned to the dealership at the end of the contract, hopefully without a serious loss in investment. If your company owns the vehicles though, that’s a different scenario. 

Valued or Valueless? 

The first thing to consider when thinking replacing any vehicle, let alone fleet vehicles, is value. Consider the mileage. When were the tires last replaced? Does it need any minor repairs, like the serpentine belt or the air filter? Any major repairs or replacements, like the battery or the engine? Try not to consider all the repair and replacement costs put into the vehicle, only the costs that might be required to prepare it for sale. 

Consider the exterior. Whether it’s a model from a decade ago or only a few years, is it a vehicle that you’re comfortable seeing representing your company? It’s served its function in your company’s fleet. Could it continue to do so? 

Value is one thing to a previous owner. Will that value translate to a new owner? Is the vehicle in a state that another buyer will consider it a worthwhile investment? Will the potential funds from selling the vehicle make a significant dent in the payment of a new vehicle? 

Specialty or branded? 

The type of fleet vehicles your company owns also plays a role in determining replacement. Is there a market for the type of previously owned vehicles your company uses? How wide are you willing to extend your search to find a potential buyer? 

Not every company puts branding on their fleet vehicles. If your vehicles do have company branding, you’ll want to have that removed before attempting to sell. This detailing process may only be in the hundreds, but multiplied by the number of vehicles in need of replacement? Those numbers add up.  

Fleet Costs? 

If you’re looking to replace the vehicles in your fleet, maybe now is the time to consider getting out of fleet. According to the 2020 Mobile Workforce Benchmark Report, while Fleet and FAVR programs have similar mileage, FAVR programs cost 27% less. How’s that possible? Think of the costs associated with company-provided vehicles. There’s the initial payment. Then there’s the cost of fuel. Add to that the maintenance costs and repair costs.

Now say an employee leaves the company. The vehicle they were driving is now sitting idle in the parking lot. How long is the hiring process in your company? During that time, the vehicle will still require routine maintenance. Additionally, fleet vehicles expose companies to negligent entrustment lawsuits that could cost millions in settlement and litigation fees. 

Replacing Fleet Vehicles 

Fleet vehicles are seen as a benefit. They allow your company control over your image. But unless they are specialty vehicles essential to the job, their cost far exceeds their function. What’s more, there are other options available that benefit employees and guarantee your company risk mitigation and cost control. Interested in learning more about getting out of the fleet business? Check out our guide, Fleeting Costs: Transitioning Your Idle Fleet to FAVR. 

Read the Guide

The Author

Ben Reiland

Ben Reiland is a Content and SEO Specialist with Motus, LLC. When he isn't sharing the latest mobile-enabled workforce trends, he's keeping an eye out for industry impacts. Ben's expertise ranges from mobile device management and vehicle programs to labor laws and more! Find him on LinkedIn.

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