How to Decrease Fleet Costs with Proper Vehicle Acquisition Practices

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It doesn’t matter if your vehicle acquisition network is small or large, every fleet manager can benefit from improving their vehicle acquisition practices. Purchasing vehicles is an expensive part of operating a fleet and even small breaks can add up to large savings.

In this article, we will outline how to decrease fleet costs with proper vehicle acquisition practices. We will go over tips and strategies to acquire vehicles for as little as possible. We include information on the best places to purchase fleet vehicles (dedicated fleet departments, original equipment manufacturers, and bailment pools). We also cover how to perfect the timing of vehicle acquisition, and the best way to negotiate with manufacturers.

What is Vehicle Acquisition?

It may seem like vehicle acquisition is an effortless process and that it's easy to pick out a vehicle and buy it. Seasoned fleet managers know better. Vehicle acquisition is complicated and involves making many difficult, long-lasting decisions for the fleet. It’s certainly a complex process to acquire a fleet vehicle.

Fleet Vehicle Acquisition from the Right Place

Understanding the best place and time to acquire new vehicles for your fleet is incredibly important. Below we’ve outlined helpful tips to aid fleet managers who are looking to save time and money while purchasing new fleet vehicles.

Dedicated Fleet Departments

If you are looking to decrease the cost of vehicle acquisition start by using dealerships that have a dedicated fleet department. Fleet sales reps understand the industry and are generally more able to provide competitive pricing without relaying back to a manager, saving you time as well as money. Purchasing vehicles through a fleet department is, on average, faster and less stressful than retail.

Factory Ordering

If you are a large fleet you can take things to the next level and order directly from original equipment manufacturers (OEMs). Planning in advance will help you get the most out of factory order pricing. Purchasing fleet vehicles from OEMs directly reduces costs by cutting out the dealer and their markup.

Buying direct from the factory also lets you order exactly what you want instead of being stuck with the limited selection of a dealer’s inventory. Ordering directly from an OEM is by far the most economical method of vehicle acquisition. It ensures consistency in your fleet. When outfitting your vehicles you can get exactly the options you want for your fleet.

Bailment Pools

Bailment pools are inventories of vehicles that were previously built on consignment that are awaiting sale and upgrades by leasing companies or dealers. Buying fleet vehicles from a bailment pool has the benefit of pricing discounts and fast delivery.

The downside to bailment pools is you are stuck with a limited selection of options for vehicle acquisition. Only vehicles in the pool’s inventory are available for purchase. However, if a vehicle fits your needs it can be acquired at factory pricing levels and delivered quickly. Bailment pools can also shorten your order-to-delivery timeline.

Perfect the Timing of Your Fleet Vehicle Acquisition

Timing is important when engaging in fleet vehicle acquisition. When exactly is the best time to order depends on a number of things. The main thing fleets should consider is when an order has to be made for the vehicle to be delivered on time. However, fleet vehicle acquisition is complicated and it should be noted that the timing of an order will affect the purchase price of the vehicle.

The best way to determine when to order vehicles is to start at their delivery date and work backward. First, you should know what date the vehicle is needed by. Then find out the vehicle lead time and if upgrades will be required (and how long they will take).

Finally, get the information on what the estimated shipping time will be for all shipping options. All of this information will guide you to understand the right time to place orders. Planning vehicle acquisition early is always a good idea. You would also be wise to stay up to date with manufacturers’ production schedules. Understand their cut-off and start-up dates for ordering.

You should also understand the cycles of the fleet vehicle acquisition industry. Often fleet managers will order new vehicles later in the year because they can sell their old vehicles at higher resale prices. This influx in orders often causes delays for deliveries in the spring. Ordering before this rush can potentially avoid these delays. Other fleets stagger orders throughout the whole year in order to avoid delays, which can be costly to your fleet.

Negotiate WIth Manufacturers

Fleet managers are often able to negotiate an incentive program with OEMs to reduce the cost of purchasing vehicles. These incentives are generally based on annual order volume throughout the year. Make sure to review your incentive agreement to make sure you are getting the most competitive incentives based on the length of your agreement and annual order volumes.

Make sure you consider all available manufacturers. Don’t get caught relying on one OEM just because you have a history with them. If you want to get the best price be sure to reach out to new manufacturers and get quotes from them.

You should know every manufacturer, every option available, and their price. You may be pleasantly surprised by the offers you receive. Or you may stick with the same manufacturer you always have, either way, you’ll understand the landscape better and know you got the best deal possible.

Sourcing multiple deals also helps in the case where you need a contingency plan. If the deal between you and your main manufacturer goes sour, you’ll have options ready to go right away. Having a large vehicle acquisition network to fall back on is always a great strategy.

Vehicle acquisition can be costly for fleets. Find out how to keep your fleet on budget with the use of Azuga Fleets™ smart software. This innovative fleet tracking technology can not only save fleet companies but also boost productivity, improve safety, and help increase customer retention.