Auto Fleet Market Trends Blog

September 29, 2008

The bread-and-butter customers of out-of-service fleet vehicles are buyers with C and D credit, namely subprime buyers. However, funders have tightened underwriting standards to manage these higher risk borrowers. Some lenders have caps on how low a FICO score they are willing to fund, which is often above the threshold of subprime borrowers. If this continues, it will have significant long-term implications for the sale of used fleet vehicles.

Tags: Credit, Used Fleet Vehicles

September 23, 2008

Due to staffing constraints, the Federal Motor Carrier Safety Administration (FMCSA ) can currently only audit about 2 percent of nation's truck fleets. In response to these resource constraints, FMCSA is developing a Comprehensive Safety Analysis (CSA) 2010 initiative to implement new ways to reduce truck-related accidents. CSA 2010 will measure a fleet's safety performance through data uploaded from fleet compliance activities and accident reports.

Tags: Comprehensive Safety Analysis, CSA, FMCSA, SafeStat

September 22, 2008

When a company decides to brand vehicles with either logos or full-vehicle advertising wraps, it may inadvertently create a situation that puts employees in conflict with homeowner association restrictions on the parking of commercial vehicles in common areas. Most homeowner associations allow commercial vehicles as long as they are garaged, but not all fleet vehicles can fit in a garage due to height or length. An estimated 50 million Americans live in homeowner association communities.

Tags: AFLA, brands, commercial vehicles, corporate logos, HOA, homeowner associations

September 19, 2008

The high cost of fuel is causing more employees to use fleet vehicles for personal use since many companies pays for gasoline. Although overall fleet mileage has increased, there has not been a corresponding increase in reported personal use miles. Companies that allow drivers to take vehicles home, but do not allow personal use, report a growing problem of policing unauthorized personal use by employees looking to reduce their "personal" fuel costs. This is a broad-based industry issue.

Tags: fraudulent reporting, increased mileage, non-compliance, personal use

September 12, 2008

The 2008 model-year produced mixed results in order-to-delivery (OTD) perfromance. A protracted UAW strike and flooding in the Midwest delayed some models, while other models posted improved OTD due to reduced retail sales, which expedited fleet production. In addition, there was sufficient rail car availability due to soft retail sales and a decrease in quality holds.

Tags: 2008-MY, American Axle, ARI, Donlen, GE Capital Solutions Fleet Services , LeasePlan USA, Order-to-Delivery, OTD, PHH Arval, United Auto Workers strike, Wheels, Inc.

September 9, 2008

When fuel prices crossed the $3.25 per gallon threshold, fleets began looking for ways to downsize vehicles or opt to four-cylinder engines.This trend is reinforced by corporate sustainability initiatives and/or fuel spend/GHG reduction programs. The shift to four-cylinder engines is broad-based and includes many of the nation’s largest fleets. One consequence to this increased demand for four-cylinder models is that fleets have increased their purchases of import-badged vehicles.

Tags: downsizing vehicles, fuel, import-badged vehicles, new-vehicle fleet orders

September 8, 2008

With a dramatic decrease in retail truck sales, some fleets are concerned that assembly plant closures and production slowdowns may delay truck deliveries and ship-thru upfits. In addition, there are further concerns about potential fleet allocation issues, availability of transportation, extended lead times caused by shift eliminations, and reduced special equipment runs. One challenge is moving completed upfit vehicles back into "traffic" when an assembly plant is shutdown.

Tags: assembly plant closures, extended lead times, fleet allocation issues, plant downtimes, production slowdowns, ship-thru upfits, truck deliveries

September 5, 2008

On Aug. 27, the Securities and Exchange Commission raised the possibility that approximately 110 U.S. publicly traded companies will be able to use international accounting standards (IAS) next year and may require all U.S. companies to switch to IAS between 2014-2016. There is a 60-day comment period about the SEC proposal. Fleet leasing will be impacted by the adoption of IAS. It is probable that all fleet leases in the U.S. will need to be capitalized sometime in the 2011-2016 timeframe.

Tags: accounting standards, FAS 13, FASB, IAS, IAS 17, IASB, Leasing, SEC

September 2, 2008

With fuel prices remaining elevated, many companies are wondering whether they are charging enough for personal use. At some companies, this discussion is long overdue. When re-evaluating personal use charges, a common mistake is to focus solely on the cost of fuel, which is understandable because, after all, fuel is the catalyst for these discussions. However, doing so ignores the other “hidden” costs of personal use, which have also risen.

Tags: company-provided vehicles, vehicle depreciation