Ask The Experts Archives
Previously Asked Questions
What is the basis for determining price of new vehicles?
What are the three greatest opportunities to reduce cost?
All fleet management companies tell us that we should replace the majority of our vehicles in the fall and the rest in the spring. Do you recommend this as a firm policy, or are there better ways to manage depreciation costs?
Describe the technology you use for remarketing and how it adds value for my company.
How do you assist us with selector creation?
Answers
What is the basis for determining price of new vehicles?
Prices for new factory ordered vehicles are determined based on manufacturer base invoice plus freight and additional options, less any available incentives. Courtesy delivery fees are assessed based on delivery preparation. Our standard practice is to be sure that those fees are included in our pricing to eliminate surprises for our customers. Courtesy delivery fees can be billed separately if you prefer. For open end leases, the final capitalized cost an invoice adjustment is also factored in. The size of that adjustment depends upon various details of your requirements.
What are the three greatest opportunities to reduce cost?
Depreciation, fuel and maintenance hold the greatest opportunities to reduce cost.
All fleet management companies tell us that we should replace the majority of our vehicles in the fall and the rest in the spring. Do you recommend this as a firm policy, or are there better ways to manage depreciation costs?
Time of year market fluctuations certainly have an impact on depreciation costs. The fall and spring cycles historically provide better returns on resale. We see this general policy often utilized, but not always effectively managed. It is most important to time when the vehicles will be sold, not ordered. For example, many times people place their orders in the fall, thinking they are timing the market correctly. The new vehicles arrive in the winter, forcing the sale of the old vehicle during an unfavorable time of year for resale. We recommend that our clients pay particular attention to order-to-delivery schedules and we will proactively advise our clients when we note a problem. Another way to lower depreciation costs is to select the proper vehicles. Too often models are chosen because of their cap costs and incentives and this doesn’t necessarily translate to the lowest net depreciation. When thousands of off-lease fleet vehicles go up for sale, sometimes having a vehicle different from the rest will yield a better return.
Describe the technology you use for remarketing and how it adds value for my company.
Mike Albert initiates Remarketing of vehicles upstream 90 days prior to lease expiration. We aggressively market vehicles to the current driver or family member at a wholesale price which reduces end of lease expenses and holding costs. If the vehicles are returned off-lease, Mike Albert utilizes internet based auctions, cyberlots and cybersales so that vehicles are available for sale to a worldwide base of dealers 24/7. Broadening the customer base and increasing the vehicle's exposure will result in higher sale dollars and faster turn cycles for greater net sale proceeds.
How would you assist us with selector creation?
Our team of leasing and fleet disposal professionals meets to discuss which vehicles will meet your needs and perform best in the resale market. We will assist you in creating a vehicle selector by first analyzing your fleet usage needs. We combine our knowledge of your business with our vehicle expertise, in addition to available manufacturers' incentive programs and develop a selector list that offers appropriate vehicles with financially responsible lifecycle cost.
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