Fleet software in the news
4th June 2009
Marie Jarrold set to save BCA £700,000 on fleet costs
Two decisions taken by BCA fleet manager Marie Jarrold within the past seven months could end up saving the company more than £700,000.
The first, a move to longer replaceement cycles, echoes a popular trend among fleets which lease their vehicles. For BCA, which outright purchases its vehicle fleet, the action brings an immediate benefit to the bottom line.
BCAs policy changed in October from four years/80,000 miles to four and-a-half years/90,000 miles. The company, which spends £1.2 million a year replacing 100-120 vehicles, estiimates a one-off saving of £641,000 by deferring financial outlay.
There is a cost to extending replaceement cycles: maintenance bills will rise and the re-sale value will fall slightly. However, BCA estimates the impact to be minimal - £200-300 per vehicle on higher service costs.
"Driver loan contracts have been extended under HMRC rules and vehicle valuations have been reviewed and revised on future CAP residual value and driver mileage expectaations," says Jarrold.
The revision has not been without its hiccups, largely due to BCAs fleet policy of buying used cars up to a year old and 15,000 miles. Some cars will return to market aged more than five years old. CAP, though, only provides residual data up to four years.
During discussions with CAP, Jarrold discovered that other fleets were also requesting valuations at 54 months and beyond. She is currently averaging the residual forecasting between 48 and 60 months while CAP works to extend its RV model.
In January, Jarrold introduced her second cost-saving measure, a two-pronged efficiency drive which capped cars at 160g/km of C02 and set a minimum combined fuel consumpption of 40mpg.
Lowering the average emissions øthe target is a 10% reduction over the next 4.5 years - will save the company between £4,000 and £39,000 on road fund licence, depending on vehicle choice. It will also shave £18,000 off the annual fuel bill.
Setting a 40mpg limit will lop another £20,000-36,000 off the fuel bill every year.
Its average fleet efficiency has already risen from 44mpg to 46mpg on purchases made since January.
The remarketing company's 340 company car drivers now select from a seven-band options list based on engine size and value.
Prior to the policy changes, BCA was already running one of the most costtefficient fleets thanks to its policy of purchasing only used cars. Almost all the cars are sourced internally, at one of BCA's auctions.
The savings are considerable and raise the question about why more fleets don't consider a used car fleet policy.
"You need market knowledge and we have that with Nigel Everitt, general manager of vehicle procurement:' says Jarrold. "But when you evaluate the benefits of contract hire versus outright purchase and look at the advantages of buying a used car, I can't see why other companies don't consider this option:'
As an example, Jarrold points to a recent purchase of a Saab 9-5 with a list price of £26,000. She acquired it as an eight-month-old car for just £16,000.
'We wouldn't have such a broad spread of cars if we had a new car policy - we'd need to be dual or solus badge to get such a good deal..·· she adds.
The downside is having to wait until new models, such as the Vauxhall Insignia or Honda Insight, become available on the used market. As a result, BCA's fleet will never be in the vanguard when it comes to adopting the latest high-efficiency models or alternative fuel vehicles.
Under its car ownership scheme, BCA buys the car and the driver pays a fixed payment each month based on the whole life cost. BCA considers it a grey fleet because the driver is paying directly for the car; ifs not classed as a benefit-in-kind.
At the end of thecontract term they have the option of buying the car outright at the loan balance, although few do [last year, just six out of a possible 120 did]. The rest are remarketed through one of BCA's 21 auction centres.
In total, Jarrold oversees 398 vehicles, including 20 pool cars, several utility vehicles, two fire engines for the airstrip adjacent to the Blackbushe auction centre in Surrey, motorcycles, a JCB digger and road sweepers.
Managing the fleet was made easier last year after BCA implemented Jaama's Key2 software. It included a bespoke reporting function to detail maintenance costs for every vehicle.
"It has shown me which vehicles are potentially more cost effective to have on our fleet," Jarrold says.
After five years as BCA's car fleet controller, during which she has won two Fleet News Awards, Jarrold continues to build her knowledge via training. She is close to completing the Institute of Car Fleet Managemenfs diploma in fleet management after passing its certificate of car fleet management with distinction.
"The diploma helps to give me a wider view of fleet management:' she says. "I meet peers and colleagues on the course which gives me an insight into how their fleets work. I keep in touch with them now to discuss problems and solutions:'
Jarrold adds: "Everyone comes into fleet management in a strange way, such as HR orPA- no-one really wants the role, ifs not seen as a career move. But once you're in, you realise ifs so diverse - no two days are the same.
"Ifs not just car management, ifs people management, and there's always a fresh challenge:'
Company facts
Name BCA
Business Vehicle remarketing Car fleet controller Marie Jarrold Reet size 398 !including 340 company cars, 20 pool cars, motorcycles, road sweepers and two fire enginesl
Funding policy Outright purchase of used cars up to one year old/15,000 miles
Replacement policy 4.5 years/ 90,000 driven miles
http://www.jaama.co.uk
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