Optimize Fleet Resale Value
Optimize Fleet Resale Value
Posted on January 20, 2020
Careful management of your cargo van fleet across the entire span of ownership will ensure optimal vehicle profitability when it comes time to replace or upgrade your vans.
Whether you are a small business owner, the fleet manager for the company, operations director, or otherwise involved in fleet management as an owner/operator or employee, the importance of strategic planning of vehicle maintenance/upgrades and timing the sale and replacement of your vehicle fleet is a part of daily work life. With most cargo fleet vans experiencing a life cycle of three to five years whether leased or purchased, maintenance and preventative upgrades, in addition to fleet replacement planning, are critical.
Whether you are a plumbing company or a last-mile delivery service provider, three main products currently exist to keep your cargo fleet interiors in top shape. These are all great options for your fleet, as they are temporary, removable upgrades that can either stay with the van as a vehicle upgrade included in the sale or they can be removed and installed in your new fleet.
Rubber floor mats - Rubber floor mats are virtually indestructible. They protect against mud and water damage, grease, food and beverage spills, and interior carpet wear and tear. Also, they offer non-slip and cushioning properties, providing your staff with added comfort, safety, and protection.
Plastic or wood floor protection - Beyond the obvious protection from scratches, dings, and eventually rust, whether you select plastic or wood floor protection, the visual appeal of upgraded floors is tremendous and instantly obvious. These products demonstrate pride of ownership and attention to detail and will be appreciated by customers and employees alike.
Wall liners - Wall liners are perhaps the most impactful way to protect your cargo van’s interior. In addition to protection from dings and scratches from shifting tools and cargo during transport, wall liners offer environmental benefits for your team of drivers. They will notice decreased exterior noise pollution due to the insulation. Additionally, the temperature control system inside the van will be much more efficient, leading to increased driver health and comfort. With the large carrying capacity, most vans offer, maintaining adequate and safe temperatures is difficult during both the summer and winter months. Wall liners will help.
Experts recommend replacing your vehicle fleet every three to five years. Both auto and service industry studies show that profitability is maximized when this resale schedule is adhered to.
These practices are critical for three main reasons: financial prudence/profitability, employee satisfaction, and effective sales and marketing.
For most small business owners, this is the overarching concern when considering fleet management and sales. The importance of making sound financial choices when choosing a fleet replacement schedule is impossible to ignore. Here is why.
After the three to five year mark, most vans experience a significant decrease in value. Major systems that were previously operational need service or replacement. Mileage begins to climb above a point that new buyers deem safe or prudent. Tire replacement is necessary or imminent. Additionally, the risk of accidental damage, including dents, scratches, and broken accessories increases. These are items not protected by upgrades to your interior.
Cargo van fleet owners have an even weightier reason to ensure proper upkeep and manage a repair and maintenance schedule. Because vehicle owners carry the added responsibility of placing their vehicle for sale and negotiating sales terms when the times comes to replace the fleet, planning a fleet replacement schedule and sticking to it is essential.
Buyers are simply not looking for high mileage cargo vans or vans which will require additional maintenance immediately following purchase or shortly thereafter, such as batteries, tires, brakes, paint, and large repairs like transmission service. Buyers also refrain from purchasing vehicles that are aesthetically unappealing to their customers and staff.
Planning for replacement can be very financially advantageous. When cycling the fleet correctly we are able to have greater purchasing power with the manufacturers. Not only will we save on the acquisition but you will see a great improvement in fuel economy, maintenance costs and employee retention as they will only have to worry about doing their job at hand and not the maintenance and repair of an old vehicle.
Contact us today so that we can work on setting you and your company up for success with Paradigm Fleet Services.