Save Money: Streamline Your Construction Fleet

Work with a fleet management company to find the best vehicles at the best prices and ensure timely maintenance.

Whether you need to purchase new equipment, expand operations or invest in growing your business, finding the necessary cash could be as easy as reconsidering your fleet of vehicles. Instead of financing a depreciating asset, you could optimize your cash flow by establishing a separate line of credit to acquire vehicles through a fleet management company. 

This will help you preserve your cash reserves, and it allows you to take advantage of your company’s bank line of credit for other business opportunities.

A fleet management company has professionals who analyze and identify vehicles that best fit your company’s needs, minimize the purchase price, authorize the most economical and timely maintenance and repairs and increase the sales value by knowing and understanding the complexities of various market conditions.

Most construction companies that have between 500 and several thousand vehicles in their fleet generally have automotive industry experts on their payroll who perform the tasks mentioned above to control costs, maintain a brand image and optimize cash flows. 

But construction companies with medium-size fleets typically cannot financially afford to have fleet vehicle professionals on their payroll. These companies may be best served by outsourcing to vehicle fleet management professionals who have extensive automotive industry experience and can ensure the dollar spend of buying, selling and operating vehicles over a period of time, which results in the best economic solution for a contractor’s business. 

A vehicle fleet professional can be compared to a tax professional. Large construction companies often have tax professionals on their payroll because of the expertise needed to maximize their cash flow and ensure compliance with tax laws. Smaller contractors may outsource this function to a certified public accounting firm. Just as it makes sense to outsource to a tax professional, it also can be wise to outsource the fleet management function. 

For example, a Maryland-based contractor with a fleet of more than 30 vehicles, mostly full-size work vans, had been purchasing and outfitting vehicles on an individual basis. After purchasing the vehicles, they had to be painted and outfitted with bins, racks and trailer hitch packages, costing about $30,000 to put an outfitted vehicle on the road. 

The contractor decided to work with a professional fleet management company that offered vehicles at a reduced price, which included custom paint, bins, racks and towing packages with full maintenance. By working with this company, the contractor put five fully-outfitted vans on the road for what it previously cost for two. 

Best Vehicle for the Best Price

A construction business owner can get the best value in vehicles by working with a professional fleet management company that knows the best time of year to order new vehicles for the lowest prices and largest selection. This generally means ordering early in the model year, between August and October, and taking the delivery later. 

If you do not have a vehicle acquisition strategy, you might pay more for leftover inventory and have few choices to find the right vehicle capacity for your job. Increased performance and better fuel economy come standard in most new vehicles, and since many of the newer models feature smaller engines with expanded capacity, insurance costs can be lowered by choosing the right capacity vehicle. 

Preventive Maintenance Program

A maintenance program that includes everything from replacing wiper blades to rebuilding transmissions for one monthly rate can help you better manage expenses and ensure that your vehicles will operate at peak performance, which reduces the expense of downtime. 

Working with service advisers who have been certified with Automotive Service Excellence (ASE) can provide the most economical, timely and high-quality repairs when needed and help you maximize warranty benefits, rebates, price breaks and other opportunities to minimize expenses. Their expertise and negotiating ability can help you avoid paying for unnecessary repairs and service not covered by the warranty.

A preventive maintenance program can be structured in many ways to suit your budget and needs, and a fleet management company can serve as a watchdog. For example, if a repair shop recommends new spark plugs for a vehicle that has 60,000 miles, the fleet management company will question the purpose of the tune-up. 

The fleet management company will know that spark plugs in most vehicles last for 100,000 miles unless there are drivability problems. The company will know that many of the fluids used in today’s vehicles, such as transmission fluid, differential oil and engine coolant, include extended service intervals. 

Vehicle Replacement Program

A managed vehicle replacement program, sometimes called cycling, can ensure you acquire vehicles at the best price, with all possible discounts and rebates. Cycling can also help a construction company replace vehicles at appropriate intervals to achieve the best operating performance and resale value. 

A professional fleet management company that has experience navigating the complexities of the sales process can provide suggestions on what vehicles have the least amount of risk. They can also help manage the sales process to maximize price values for a fleet of vehicles based on their knowledge of market conditions. They have access to the sales channels that can drive the best possible resale price for vehicles, such as franchise and independent dealers and physical and online auctions.  

The Bottom Line

Outsourcing to a professional fleet management company can alleviate distractions and allow you to spend more time on your business. Instead of spending time and money dealing with issues related to buying and selling cars, managing maintenance and repair bills, and monitoring fuel purchase receipts, outsourcing to a fleet management company gives you more time to achieve strategic goals and objectives, improve business processes, take care of customers and increase profits. 

Outsourcing Benefits

A professional fleet management company should play the role of watchdog to ensure the dollar spend of buying, selling and operating vehicles over a period of time results in the best economic solution for customers. Businesses can certainly perform this task without automotive industry expertise, but it may be more expensive in the long term.

Fleet management professionals can help businesses reduce their dollars spent on vehicles in five broad areas:

1. Identifying vehicles that best fit the customer’s business need
2. Attaining the best possible acquisition price, including knowledge of the manufacturer’s vehicle incentives
3. Ensuring the best possible resale price by using extensive resources
4. Leveraging in-house ASE-certified technicians to control maintenance costs
5. Recommending the best replacement time frames by using their industry expertise and regularly monitoring used car market conditions