Hallmark Fleet Study Shows Higher Mileage Costs Less

Since the 1973 and ‘74 energy crisis, Hallmark Fleet Manager Helen Bland has been expecting more mile­age out of the 1,050 cars in the company’s sales fleet, and has been getting the extra fleet car use at less per-mile cost. According to a cost study conducted by Hallmark’s invest­ment analysis experts, cars kept in service 65,000 to 70,000 miles cost less per mile to operate than lower mileage vehicles.

Although the impetus to get higher mileage out of the Hallmark fleet originally came from the energy crisis and a depressed used car market, Bland reports she will be more “leni­ent” in letting the cars go to 65,000 or 70,000 miles now that the final figures are in. Before the energy crisis, Hallmark usually replaced its cars at around 50,000 miles. Official replace­ment policy of the Kansas City, Missouri, greeting card company has now been pegged at 60,000 miles as a result of the fleet cost study.

Bland says the study was based on the sale of 300 cars retired from fleet service last year, most of which were full size Chevrolets, Fords and Plymouths. Hallmark’s investment analy­sis people studied all the fleet’s opera­tional expenses, including fuel, oil, tires and maintenance costs. For the 300 cars that had been in service an average of just over 30 months, original purchase price plus costs of taxes, licenses, insurance, depreciation and interest were included in the data that was fed into Hallmark’s investment analysis computer.

The final printout showed costs of 12.55-cents per mile for cars traded at 45,000 miles, compared to 10.35-cents per mile for cars replaced at 70,000 miles (see chart). Although some drivers originally objected to the company’s plan to keep cars rolling longer, Bland says the complaints have tapered off as drivers discover the cars continue to be quite serviceable at higher mileage levels.

In fact, some 10-percent of the 300 cars studied were sold to their regular drivers at the end of their Hallmark service. Bland disposed of about 20-percent of the cars at auction, wit the remaining 70-percent taken in trade by the various dealers who handled delivery of the company’s 300 replacement units.

Although used car prices are a factor of considerable concern to managers of leased fleets, the used car market is of vital importance to an administrator looking after a multi­ million-dollar, company-owned fleet like Hallmark’s. Bland finds appear­ance and body condition generally play a bigger role in getting top dollar for her used cars than does mechanical condition, but she requires that her drivers adhere to a regular mainte­nance program to keep the fleet running as well as it looks.

TELLING AT A GLANCE

Because expense reports of all Hallmark drivers are processed by computer through Bland’s office, the fleet administrator can tell at a glance which Granada’s oil has been changed or which Chevelle’s engine was tuned or which Small Fury has been neglect­ed by its driver. The computer charts information taken from the drivers’ expense reports and when a particular vehicle shows a blank space where a date and type of routine maintenance procedure should appear, Bland alerts the sales manager for that part of the country, who then has the individual driver take the car in for whatever maintenance is needed. Additionally, Bland requires that each sales manager conduct periodic checks of all Hall­ mark cars in his territory and send condition reports to the fleet’s Kansas City office.

Bland has logged 34 years with Hall­ mark, attending to fleet matters since 1963. She was named fleet manager in 1969, the same year she joined her lo­ cal chapter of the National Association of Fleet Administrators. Now chair­ man of NAFA’s Mid-America Chapter, Bland is in the final stages of downsiz­ing the Hallmark fleet to intermediate models. When some 300 Hallmark drivers take delivery of their 1977 cars later this year, the fleet will be made up entirely of intermediate models.

As she continually keeps her eyes on the used car market, Bland says a major money-managing function of her office is to monitor the mainte­nance habits of her drivers so the cars Hallmark is now keeping longer will be worth more at trade-in time.