FLEET LEASING : Pain at the Pumps -- Cutting the Costs of Company Cars; as Petrol Costs Go Ever Higher, We're All Feeling the Pain at the Pumps. but a Company Car Is Still a Vital Part of Doing Business for Most Organisations, and Robert Smith Discovers That Swapping a Bigger Vehicle for a Smaller, More Economical Model Isn't the Only Way to Bring Down a Company's Car Costs

New Zealand Management, August 1, 2008 | Go to article overview

FLEET LEASING : Pain at the Pumps -- Cutting the Costs of Company Cars; as Petrol Costs Go Ever Higher, We're All Feeling the Pain at the Pumps. but a Company Car Is Still a Vital Part of Doing Business for Most Organisations, and Robert Smith Discovers That Swapping a Bigger Vehicle for a Smaller, More Economical Model Isn't the Only Way to Bring Down a Company's Car Costs


Byline: Robert Smith

While there is currently a lot of talk about the problems of peak oil and the impending end to the age of the automobile, the simple fact remains that many businesses still need cars. Getting out to visit clients, meeting up with business associates and delivering information and goods is just as important as it has always been.

So, as the price of oil hits new highs on a weekly basis and the talk of an economic downturn gets louder, it's the perfect opportunity for fleet management companies to step in and manage a business' or organisation's fleet, according to Geoff Tipene, managing director of Custom Fleet NZ.

More than 100,000 vehicles travelling on Auckland's Southern Motorway pass right by Tipene's office in Mount Wellington every morning, so there is a good chance that some of them are being managed by the GE Commercial Finance-owned business. Custom Fleet began operations across the Tasman more than three decades ago and, in various guises, has now been managing New Zealand-based fleets for more than 15 years. Custom Fleet has about 32,500 vehicles under management, from passenger vehicles to heavy commercials and everything in between. Its 2500 current clients all have different needs, with some requiring more than 1000 vehicles to carry out their business, while others might only have one or two cars.

Over the past decade the company has grown to take a leading share in the New Zealand fleet management and leasing market, and Tipene says that growth remains strong, despite predictions of economic doom and gloom. "When companies are looking to free up some capital, we will look to help them through our Sale & Lease Back process. Selling their fleet to us and then leasing it back makes perfect sense. On a day-to-day level the company doesn't notice any change, we just go in and do a valuation of the vehicles in their 'car park', write them a cheque and help them with any new vehicles they might need. The only difference the company notices is a larger bank balance.

And even if the business wants to hold on to its vehicle assets, it still makes sense to use a fleet management company, especially when you have a large fleet. If you're dealing with hundreds of vehicles, the last thing you need is half a dozen staff who are employed just to manage all the company cars. So they can outsource their fleet management to us, we can maintain the vehicles, ensure they're all registered and warranted properly, and also make sure they are up to health and safety requirements."

The soaring cost of petrol at the pump is hitting the consumer hard and businesses are not immune to the pain. The larger the fleet, the bigger the impact, with a rise of just a few cents ballooning to a massive increase in costs for companies with large fleets. Part of Custom Fleet's job is to help its clients deal with the impact of these costs, although Tipene says it's not just a matter of convincing the client to trade in its bigger cars for more economic models.

Our role is not to suddenly stop everybody from using cars with six cylinders. Our first 'port of call' is to look at the overall numbers, ensure that a company's drivers are fully educated about efficient driving practices and that the vehicles are receiving up-to-date servicing; all of which can have a huge impact on fuel consumption. Businesses can't stop what they are doing but they can do it better."

Driver training is designed to show drivers the most efficient driving methods, and Tipene says Custom Fleet treats it as a science. "In Australia we have launched a programme that measures the carbon footprint of a fleet down to the individual driver level, then measures improvement over a period of time, and from that we can see if the driver has habits they could change. We will be launching this new product to the New Zealand market later this year. …

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FLEET LEASING : Pain at the Pumps -- Cutting the Costs of Company Cars; as Petrol Costs Go Ever Higher, We're All Feeling the Pain at the Pumps. but a Company Car Is Still a Vital Part of Doing Business for Most Organisations, and Robert Smith Discovers That Swapping a Bigger Vehicle for a Smaller, More Economical Model Isn't the Only Way to Bring Down a Company's Car Costs
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