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Vehicle Abuse: An Overlooked Remarketing Cost

August 3, 2015, by Mike Antich - Also by this author

The resale value of a used vehicle is determined by three factors: the unit’s age, total mileage, and overall condition. A used company vehicle in poor condition, because of driver abuse or neglect, will result in lost resale value or incur unnecessary reconditioning expense at auction.

Just as egregious as vehicle abuse is vehicle neglect, such as not changing the motor oil, which results in unnecessary engine damage. Another aspect of vehicle abuse occurs with drivers who smoke. Most companies have no-smoking policies while driving company vehicles; however, some furtive smokers are notorious about ignoring this prohibition. When taken to auction, a smoker’s car, on average, results in deducts of several hundred dollars on resale because of the pervasive tobacco odor and, invariably, cigarette-burned upholstery.

These abusive employees have little regard for the company asset and often use the interior of their vehicle as a convenient garbage can. While a vehicle is in company service, such a littered interior can represent a potential safety and liability hazard if a driver’s foot movement for braking and accelerating is impaired by a bottle or soda can rolling on the floorboard. This can – and does – happen.

Lack of Fleet Policy Enforcement

Fleet policies dealing with vehicle abuse and the need to follow the prescribed preventive maintenance schedule are very important in helping determine a vehicle’s ultimate resale value. Fleet managers who have clearly articulated policies to employees about vehicle upkeep and misuse receive a better quality product to take to auction. This isn’t anything new; most companies already have prohibitions about vehicle misuse in their written fleet policies. The problem (and this isn’t new, either) is that the majority of companies do not enforce these policies, except in the most egregious of circumstances.

Asking drivers to take better care of their vehicles is sufficient for the overwhelming majority of drivers. But, there are other employees who simply pay it lip service, especially when they know that there are no consequences to doing otherwise. Even with written policies in place, managers are sometimes reluctant to penalize abusive drivers, especially in situations that involve executives or top sales performers.

Another problem is that although these policies are “on the books,” they are not always adequately communicated to new-hires or employees assigned a company vehicle for the first time. Plus, there is a great amount of gray area since there is no industry consensus delineating the borderline between normal wear-and-tear and abuse. All of us recognize blatant abuse, but is a torn seat or scraped bumper abuse or normal wear-and-tear?

A Campaign of Ongoing Communication

As fleet manager, it is your responsibility to establish policies governing the use of company vehicles, but, even more importantly, you need to communicate these policies to employee drivers. Communication does not mean simply having an employee sign a statement acknowledging the receipt and reading of the fleet policy booklet or referencing the fleet department’s Intranet site. It involves a campaign of ongoing communication. One way to deter abuse is through regular vehicle inspections. One fleet requires mandatory quarterly checks of its vehicles – twice by the driver, who submits a vehicle condition report, and twice while accompanied by his or her manager.

Each driver should know the rules governing the use of a company vehicle. Not only should drivers be aware of these rules, but they must also understand what actions will be taken for non-compliance. Some companies charge the driver responsible for vehicle damage; however, as a word of caution, some states deem such payroll deductions as illegal. It best to check with your legal department beforehand. Other fleets assess financial liability to the operating department instead.

Another form of penalty is to restrict driving privileges, such as losing personal-use of the company-provided vehicle. Penalties are an effective deterrent to vehicle abuse and/or neglect if they are vigorously enforced. Drivers (and their managers) need to understand the circumstances under which the company may revoke or suspend the privilege of using of a company vehicle.

Corporate Policy Means Not Making Exceptions

Once policies have been established, they should be enforced uniformly, without exception. The moment you make an exception, you create precedent. As the fleet manager, it is up to you to never break this rule. You should not set precedent by allowing exceptions, even if it involves a star salesperson or senior corporate officer. While the definition of abuse may vary by company, along with how to handle negligent drivers, everyone agree on one thing – a written policy, which clearly defines abuse and its penalties, and is vigorously enforced, is the best way to minimize it.

Let me know what you think.

[email protected]

Comments

  1. 1. Ricky Beggs [ August 06, 2015 @ 03:05AM ]

    Mike, great insight and thought raising with your article on Vehicle Abuse. Giving all fleet managers and drivers something to think about that is often overlooked, is one of the things that Automotive Fleet is so good about while supporting the fleet industry. Overall condition of a vehicle is key in getting the best return at remarketing. Yes, reconditioning can correct some of the effects of a driver that did not keep his/her company fleet vehicle clean during use, but that extra recon is another added expense. The old saying of "drive it like you stole it" should not apply to the company fleet vehicle and not keeping the car clean , both inside and out, fits in that same scenario. Also to be mentioned is the perception when a customer might get a glimpse of your office on wheels. Keep your insight flowing.

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Author Bio

Mike Antich

Editor and Associate Publisher

Mike has covered fleet management and remarketing for more than 20 years and entered the Fleet Hall of Fame in 2010.

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