Nobody likes wasting money, and in business the magnitude of expenditure is much greater when every penny needs to be accounted for.
For smaller firms, making cost efficiencies can be the difference between survival or going out of business, while in large organisations, savings made at a base level can make a huge difference when multiplied across several departments or divisions.
Disposing of old vehicles
Companies with an ageing fleet will not need reminding of the problems associated with running old vehicles, with reliability, performance and appearance all suffering as time goes by.
The obvious solution is to dispose of old vehicles in favour of a new van, but for many companies, the hassle involved with disposal can prevent them from doing so.
Renewing leases can result in long lead-in times, selling at auction can be a lottery and is dependent on the vehicle’s condition, and selling privately involves paperwork, marketing collateral and a drop-off, which can all result in the vehicles simply being retained, due to ease of familiarity or lack of time.
There are alternative options, however; Northgate offers a service that eliminates much of the hassle involved with vehicle disposal, as well as ensuring maximum financial return.
The cost of downtime
Of course, businesses that do choose to run old vans will not only find that they cost more to keep running; older vans have far more miles on the clock and are also prone to breaking down more often, which has a number of knock-on effects.
Even general wear and tear can have a major impact on fleet performance and function, which leads to more repairs, more maintenance and more downtime while that is happening. Do you know what you would you do, should your van breakdown?
The cost of vehicle downtime is estimated at £727 per day in terms of lost business revenue, according to research by Autoglass.
This is not to mention the impact that downtime can have on your ability to meet customer service levels and your reputation. Many customers would not give you the opportunity to let them down twice, resulting in even further lost revenue.
Even though modern businesses account for seemingly everything in their budgets, it is a rare sight indeed for a pot to be set aside purely for fixing commercial vehicles.
There are many factors that companies often do not account for, ranging from tyres and MOT repairs, to a breakdown and replacement vehicle. This is not even factoring in the potential for accident damage and the financial outlay associated with significant mechanical failure.
A functioning fleet is vital to business continuity and each day of downtime costs the company money. If no fund is set aside to deal with these costs, when vehicles require repairing it will then have to be diverted from other parts of the business, which can have a knock-on commercial impact.
This false economy may be explained away with the attitude that the van has been bought and paid for itself, but all the while vehicle deprecation is a factor, lowering the van’s value with every day and mile that goes by.
Eventually, there comes a time when ad-hoc maintenance and repair becomes a severe cost burden and is no longer sustainable.
Although Northgate’s fleet has an average age of 22 months and the chance of breakdowns is rarer, customers receive a comprehensive service, maintenance and repair offering as standard. This not only reduces vehicle and business downtime, but provides ongoing peace of mind.
The advantages of newer vehicles
Investing in newer vehicles brings with it a number of cost benefits, with one of the key aspects being fuel efficiency, which can make a major difference when applied across multiple vehicles that each travel thousands of miles a year.
The benefits even extend to staff retention, as employees who are driving a new van have a pleasant working environment and may have perks such as Bluetooth or a sat-nav, which can boost long-term satisfaction and reduce churn.
Roofing contractor A.L. King had an ageing fleet that resulted in a number of financial outgoings, including increased running and maintenance costs and lower fuel efficiency, in addition to the brand impact of running older vehicles.
The company turned to Northgate, which provided a flexible vehicle hire solution with no upfront deposits, resulting in cashflow savings, lower running costs, and a drop in fuel wastage that was noticed by drivers straight away and had an immediate impact on business operations and the bottom line.
The result was increased employee engagement, as well as a boost in the company’s ability to meet customer expectations through greater reliability and a more attractive fleet.
By replacing old vehicles, companies can improve their ability to satisfy customer requests, boost business continuity, and ultimately reduce outgoings.
Northgate helps customers to keep track of their costs through a transparent and flexible package that provides continual peace of mind. Downtime is reduced through a comprehensive service, maintenance and repair offering, with the added benefit of an attractive, fuel efficient range of vehicles that removes uncertainty and allows you to concentrate on keeping customers happy.