Used-vehicle prices have seasonal highs and lows during the course of the year. TPWs allow fleets to time the dates that replaced vehicles are remarketed. “I have seen customers order early and negotiate target production weeks on early fall orders specifically with the intent of maximizing resale on the vehicles being replaced and with the intent of short-cycling the new vehicles to minimize depreciation costs,” said Shick. The best months for vehicle remarketing are in the fall and spring. Resale values may increase as much as 20 percent, as opposed to selling identical vehicles in the winter or summer. “With targeted production weeks, you have more control over the resale aspect of your fleet. It boils down to timing,” added Pierce. “Fleet timing is not only important as to when you put vehicles in service, but it is also important as to when you take vehicles out of service. You may want to time replacement to coincide with the traditionally strong spring resale market and the tax refund season, when prospective used-vehicle buyers have discretionary income injected into the pockets.” A fleet manager’s top priority is to obtain the highest resale for each vehicle taken out of service. A good way to do this is by scheduling TPWs so that new-vehicle deliveries coincide with seasonal highs in the used-vehicle market. However, using TPWs requires a lot of work. “Before submitting orders with future TPWs, fleet managers should consider the potential of future fluctuations in their fleets,” said Stratford Dick, director of marketing for Wheels. “For example, every fleet will face changing needs due to budget cuts, territory reorganizations, changes in who is driving the vehicle, or when a given vehicle will be needed. In addition, driver adds, deletes, and address changes may require additional monitoring and order changes. Using TPWs to schedule in advance means reviewing on an ongoing basis orders already submitted or you run the risk of having the wrong mix or timing on the eventual deliveries.” Let me know what you think. firstname.lastname@example.org
Most in procurement take the position that fleet’s primary responsibility is to buy assets and services, which annually can range from millions to tens of millions of dollars in expenditures. This amount of corporate spend requires it be managed by someone with superb negotiation skills and proven procurement acumen. But why isn’t this true for all spend categories?