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The dream of every business owner or CEO who runs a business with a lot of employees is to run smooth operations, staying efficient with costs while generating good profits at the same time. If your company relies heavily on transportation, and you would like to manage operations more efficiently, keep reading this. One of the ways you can make operations easier for your business is by having a car fleet.
A car fleet is a group of vehicles that are owned or rented for business operations such as attending meetings, visiting clients, delivering goods or services, and much more. Not only will a car fleet improve your company’s operations to boost productivity, but it will also improve the well-being of your employees. And that’s not all.
Having a car fleet to run your company affairs has a plethora of advantages that every business owner should tap into, and that is what we aim to explore in this article. To help you fully grasp the intricacies of adopting fleet vehicles for your business, let’s kick off by discussing the major types of company car fleets.
Types of company car fleets
It’s important to take into cognizance your needs and resources before you decide on the fleet type to incorporate into your business.
There are two major types of company car fleets, and they offer a variety of benefits;
- Owned car fleet: This type of car fleet requires that you take total responsibility for purchasing, and maintenance of your company vehicles, as well as any other cost that might accrue as you run your business. Owned car fleets give you complete control over the vehicles and the cost of maintenance.
If you are heavy on brand identity, and representation, then owning your car fleet is the best-suited option for your business. You have the liberty to customise your vehicle to your preferred taste, and your brand standard. It is a good choice if your company’s transportation needs are regular and predictable. For example, if you offer a courier service or you constantly need to deliver your product to customers.
However, it usually demands a high upfront investment, which is not tractable if you’re trying to manage costs. You would also have to worry about issues such as vehicle storage, increase in capital investment, insurance, and employee safety.
Another thing to consider is vehicle replacement. After using your car fleet, replacing and upgrading them could be detrimental to your business capital. You also have to worry about selling your vehicles when they depreciate, because company cars are heavily used. They travel double the miles driven by an average vehicle, which means that most fleet vehicles depreciate in less time than consumer vehicles.
Owning your car fleet will make replacing and upgrading your fleet difficult, leading to the use of aged and worn-out cars which is not a good look for your business.
- Leased car fleet: If you’re looking for a more comfortable and cost-effective option for using a car fleet, leasing is the way to go. You can lease vehicles for your business for an agreed fixed term, and return them to the leasing company at the end of the contract. This is a great option if your company requires reliable vehicles but doesn’t want to splash out on high upfront investments.
There are two leasing types;
- Open-ended leases: This is a more flexible kind of leasing. You are allowed to return leased vehicles even after the leasing contract has expired and there are no mileage restrictions or penalties. There is no set price for this type of lease, so you need to calculate the differences between the estimated value of the vehicle from the beginning of the lease to the date your contract ended.
- Close-ended leases / Retainerships: This is the most common type of vehicle lease incorporated by companies. They set fixed terms for leasing and return dates, and breaking the terms of the agreement for the retainers will attract a penalty.
No matter the type of lease car fleet you choose to adopt, you get to enjoy numerous benefits over having owned car fleets.
First off, you’re not responsible for the maintenance and repairs of fleet vehicles; that is on the leasing company, which means no maintenance headaches for you. You are also liable to enjoy discounts that the company has to offer. You don’t have to make any capital-intensive down payments, especially since you need the vehicles for a temporary need.
Replacing and upgrading fleet cars is easier since you don’t have to sell used vehicles before replacing them with new ones. Flexibility with vehicle upgrades and replacement will enable you to use modern vehicles in your car fleet which is great for your brand outlook.
According to Automotive Fleet, “Fuel is the second largest total cost of ownership expense after depreciation. Fuel represents, on average, 60{3e4ec73e7c148c7d746f0ef675592663885f802f3a27145c736987a15c9d45c3} of a company’s total fleet operating budget, which makes it crucial to manage this expense to keep fleet budgets from getting out-of-kilter.” Fuel management strategies are usually set up by the leasing company to keep it in check.
Now that you know the types of car fleets you can choose for your company, let’s answer the most frequent question most business owners ask. “Why do I need a car fleet for my business?”
Why do you need a company car fleet?
Well, here is your answer:
1. It saves cost: You’d be shocked to know that having a car fleet can help you save a ton of money on expenses. Having a dedicated fleet of cars at your disposal will help you worry less about the cost of renting cars anytime you need to commute for official purposes. Rather than relying on employees using their cars for business purposes and having to reimburse them, it is better to have a pool of vehicles that are available for use when you need them.
Here’s another amazing thing to know; with a company car fleet, you can negotiate long-term leases which also integrate the cost of maintenance, repairs, and insurance. You can agree that this is a better offer for your investment than daily or weekly rentals.
2. It improves the productivity of employees: What better way to boost employee productivity than by reducing stress?
With easy access to a range of vehicles, your employees can travel safely, and with no hassle. A reliable car fleet system will also boost productivity by improving the well-being of your employees and enabling them to focus on more important tasks.
This will also help your employees perform their roles better by curbing the stress of navigating public transport and reducing the time spent waiting for their individual rented cars.
3. Safety: The welfare of your employees should be a priority and you can ensure their safety by investing in a company car fleet. It improves the safety of official travel and logistics. This way, your employees won’t have to worry about their safety while on official trips but focus on the task at hand.
4 . Brand image: If your company relies heavily on transportation or logistics that require face-to-face interaction with its market or customers, then a well-maintained and branded car fleet can help build trust. Investing in a particular type of car fleet will help you promote a consistent brand image, which in turn increases the confidence of customers and improves the overall outlook of your company.
As a CEO or business owner who cares about the productivity and well-being of employees, brand image, and viable investments, it is important that you consider the numerous benefits of opting for a reliable car fleet and take advantage of them to improve the dynamics of your business.
If you would like to tap into the benefits of this game-changing investment, then you can count on Treepz to give you the best offer.
We have at our disposal a variety of reliable vehicles, ranging from compact cars to vans and trucks. We pride ourselves in providing a convenient transport solution to make your brand stand out, boost your productivity, and enable your employees to carry out operations efficiently with no stress!
We give you value for your money by offering flexible and cost-effective leasing options for your convenience, including short-term and long-term retainers.
Contact us today to learn more about how we can help you manage and improve your transportation needs!