They Just Don't Get It...Do They?

Off and on, nearly 40 years’ worth, I’ve been accused of chirping about the one key expense responsibility that every fleet manager should embrace. My only conclusion is that I’m not very effective as a communicator. But, I’m willing to keep trying.

Depreciation has been and continues to be the largest single factor of expense in running a fleet that a fleet manager can actually do something about. Yet, there continues to be irrefutable evidence that this vital area is either ignored or fails to be discovered.

So-called “acquisition” surveys haven’t varied much over the years. “Initial Cost” has pretty much led the way for being the singularly largest factor influencing vehicle buying decisions, although last year “Job Suitability” barely nosed out initial cost (my guess is that there are too many SUVs that cost more than sedans, so the suitability factor enters in).

With tongue in cheek, I’ll immodestly take credit for “Depreciation” climbing up from 5th spot (in 1990) to a spectacular showing of the 4th most important buying influence 10 years later. Wow! Some must be listening to me. (They’re still not getting the point.)

Now hear this. Among the most popular fleet cars today you can fully expect to recover less than 40 percent of their new car cost three years later with 60,000 miles. It goes down to about one-third if it is in the 75,000-mile range. Figure that cost out on a $19,000 cap cost on the books; then add what it costs you to process it through the auction and wait for your check. The cost is egregious.

Does anyone need more fuel for the fire? The NAFA Foundation just released an analysis of benchmark study on fleet account “satisfaction” sponsored by GM, Ford and DCX. It cost a lot of money and was handled by a large research firm. While the study is flawed, in my opinion (perhaps my comments at another time), there is some validity to the results.

The listing of the “Top 10 Improvement Priorities” defines seven of the 10 having to do with how the local factory fleet rep should be doing a better job. No. 5 was “Quality of Vehicles.” Way down at No. 7 was (you guessed it) “Value for the Money Paid.” Presumably, this is some sort of combination factor between buying and selling costs.

Keep in mind that “more important improvements” focused on the (poor) factory rep to be: more responsive; understand the account’s specific needs; be accessible; have ability to solve problems; and be knowledgeable about his/her own products. Yikes!

Turning to another part of the study analysis and listing what fleet managers were “least satisfied” with. Leading here was the length of time from order to delivery, then status updates on the orders, followed by their disappointment with product information available on the Web sites. Amazingly, “residual value and resale value” showed up in fifth barely ahead of “ease of navigation on the Web sites.”

What’s wrong with this picture? I get a lot of e-mail, faxes, voice mail, regular mail and talk to a lot of people in our business all year long. In all my lime and with all my carrying the flag for the importance of fleet residuals as our No. 1 priority, has even one person told me I was wrong.

The credibility gap has to be assigned somewhere else.