CBVC highlights savings of outsourcing fleet management in a new report saying that the traditional fleet manager, once hailed as the guardian of the company car, is now an endangered species, especially in the small business sector.
It says the resource-intensive role becomes difficult to justify when outsourcing fleet management can save thousands.
According to a new report – Modern fleet management and the drive to reduce costs – from CBVC Vehicle Management, the fleet management and leasing specialists, SMEs with a fleet of 125 vehicles could save up to £27,000 a year or £81,000 over a typical three-year car cycle if they were to outsource the fleet manager function.
Mike Manners, managing director at the Staffordshire-based fleet management and leasing specialists, said: “In an environment where businesses are constantly looking for cost savings in all operational areas, it is increasingly difficult for SMEs to justify employing a fleet manager.
“Based on our calculations, a fleet manager running a 125-car fleet works out to around £33 a vehicle per month whereas outsourcing could cut the costs by over half, to £15 per month per vehicle. So it is little wonder that modern fleet management best practice is looking to outsource the function.”
Modern day fleet management has become a complex function, requiring an increasing amount of specialised skill sets in an increasing number of disciplines. And savvy businesses are looking for more efficient ways of managing the functions.
And, the stats seem to bear out the trend. As far back as 2012, Alphabet Fleet Management reported reductions in the numbers firms using a fleet manager from 66% to just 27%.
Mike added: “Fleet management used to be a simple matter. But now the market has fragmented thanks to specialists in particular disciplines of fleet management, and the increasing complexity required to deal with the changing fleet landscape of legal, tax, and duty of care compliance.
“A full-time fleet manager has to stay on top of a multitude of fleet management disciplines to ensure fleet compliance and that all risks are fully managed. And, that’s a wide spectrum for one person to master and manage.
“It’s further complicated when businesses migrate the fleet function into other departments such as HR or Finance.
“We are finding that, increasingly, enterprises that run car fleets are turning their backs on what is considered old school style fleet management – by a fleet manager – and seeking to outsource to sector specialists.”
Such outsourced fleet management specialists now offer a broader range of services, covering acquisition, day-to-day operational management, rentals, fleet policy development, duty of care compliance and vehicle disposals.
Mike concludes: “While a fleet manager is immediately available during their working hours, a typical fleet management company provides you with 24/7 support with a dedicated and professional team as well as the ability to quickly scale up the service.
“Additionally, there are further benefits thanks to the nationwide agreements and bulk-buying capability fleet management companies are able to secure for their range of clients.”
Typical fleet manager costs to a company
The example below is based on a fleet manager looking after a fleet of 125 vehicles – the costs are conservatively what you can expect for the sector and cover all support costs associated with such a management position.
Saving of £6,750 per month, or £27,000 a year, are achievable. On a typical three-year car life cycle that’s £81,000 on the bottom line.
|Fleet manager per annum||£30,000|
|Systems / IT Support per annum||£5,000|
|Employers NI per annum||£4,140|
|Company Car/allowance per annum||£4,000|
|Holidays and absence cover per annum||£0|
|Training per annum||£1,000|
|Professional memberships per annum||£500|
|Admin & HR Backup per annum||£5,000|
|Total cost per annum||£49,640|
|Cost per vehicle per annum||£397|
|Monthly cost per vehicle||£33|
Source: CBVC Vehicle Management