Have you ever stopped to think about whether you are making the best decisions when it comes time to dispose of a company vehicle? If you haven't yet structured a fleet demobilization process, you may be missing a valuable opportunity to optimize your processes intelligently.
This is because demobilization offers a direct solution for car disposal, ensuring that this procedure does not become a snowball for your business.
But it is crucial to consider several aspects so as not to compromise financial health and, at the same time, increase productivity by incorporating new and efficient vehicles.
Therefore, throughout the content we will explain what fleet demobilization is and share some guidance on how to overcome the most common challenges and make everything more hassle-free.
What is fleet demobilization?
How and when to demobilize the fleet?
What are the biggest challenges of fleet demobilization?
How does a telemetry system help with fleet demobilization?
What is fleet demobilization?
In short, fleet decommissioning is the process of finding a suitable destination for a vehicle when it is no longer useful to the company or has reached high mileage, requiring increasingly expensive maintenance and repairs.
This presents you with some significant challenges, such as keeping a vehicle parked in the garage or covering its expenses. In this sense, decommissioning emerges as a smart strategy to optimize resources, prevent unnecessary expenses, and free up space for more efficient cars.
In this way, vehicle demobilization can be associated with reverse logistics, since conventional logistics focuses on bringing products to the consumer, while reverse logistics includes the responsible disposal of the company's assets, even after consumption.
Besides being a sustainable practice, decommissioning can be a source of profit for fleet management. But how? The vehicles may end up being sold, depending, of course, on their condition, which represents an opportunity for financial recovery.
Suggested reading: Fleet maintenance plan: how to develop one and ensure greater safety in your operation.
How and when to demobilize the fleet?
To ensure that the decommissioning of a profitable fleet is a cost-effective process without negative impacts, it is crucial to consider several aspects, such as costs, depreciation, contract duration, and mileage.
In other words, identifying the opportune moment to start this process and noticing some indicators are crucial steps. Follow:
Consider the useful life of the vehicles
Including regular maintenance is the starting point for extending the lifespan of your vehicles as much as possible, reducing the need for fleet downtime after fleet loss.
Furthermore, knowing when the useful lifespan is coming to an end is another important factor in understanding when to begin the process.
Diogo Ilha, CEO of Motor Market , a company that handles the entire vehicle decommissioning process – document management, vehicle preparation, storage, inspections and reports, vehicle pricing, sale and transfer – shares that:
“It is important that companies do not exceed 100 km, as this greatly affects the residual value of the cars. If we evaluate rental companies, which make a living from selling cars, we will see that they do not allow customers to use their cars for more than 120 km.”
Therefore, if you intend to sell your car, keeping the mileage below 100.000 km is the ideal strategy.
Suggested reading: Light vehicle fleet renewal: what it is and when to do it.
Choose ideal demobilization for vehicles
Vehicles do not always go through the same demobilization process. Some tend to go to dealerships, others to auctions and even to the company's own drivers, for a more affordable price.
However, the question arises, how to choose the most suitable destination for the vehicle?
First, it's necessary to assess the actual condition of the vehicle. Dealerships, for example, often acquire nearly new and used cars that are in good condition, or, in rarer cases, vehicles that require minor repairs and investments.
As for auctions and drivers, vehicles may even show some wear and tear. However, it is important to prevent them from reaching terrible conditions, so that they have to be sold at a bargain price.
Regarding this attention to deadlines, Diogo Ilha reinforces that:
“In very severe operations it is important that demobilization does not exceed 24 months, or sometimes up to 12 months. Otherwise, the cars will have to be sold as scrap at the end of the contract. Companies that work with fertilizers, mining, telecommunications and energy generation and distribution are examples.”
In this sense, the most interesting thing is that your fleet management also establishes usage limits for your vehicles and that, when these limits are exceeded, they enter a decommissioning process.
Some companies work with clear rules in fleet policies so that drivers take care of their vehicles in the best possible way and, therefore, have the right to purchase them with advantageous discounts and often well below the Fipe Table.
Take care with the necessary documentation
Another crucial aspect is keeping an eye on vehicle paperwork. It is essential to fill out the forms correctly and check if there are pending issues with the traffic authorities, such as fines or documents that have not yet been paid.
As a result, you guarantee a more efficient, safe and trouble-free fleet demobilization process.
What are the biggest challenges of fleet demobilization?
This will come as no surprise to you, but there are many aspects that must be taken into consideration when demobilizing vehicles in your fleet management.
Therefore, the process can be somewhat complex, as it is necessary to carry out a survey of the company's cars, to understand whether the assets are still meeting the needs and expectations of your business.
To conduct this survey, keep in mind aspects such as:
- Fuel consumption
- Condition of the vehicle
- Mileage
- expenses with preventive and corrective maintenance
- Strategic and operational objectives of the operation
This way, by analyzing this data, you can define whether it is still worth continuing with the cars or assess whether it is not the right time to start demobilizing the fleet.
Therefore, determine whether the vehicles remain efficient, generate unnecessary expenses and can meet the goals established in the planning.
Therefore, it's possible to assume that there are two major challenges when it comes to decommissioning vehicles: understanding the ideal time to take a vehicle out of operation and the correct way to do it.
The good news is that you can easily overcome these obstacles with the capabilities of a telemetry system. Go to the next topic and understand how.
How does a telemetry system help with fleet demobilization?
At first glance, the idea of how a telemetry system can help with vehicle demobilization might not make much sense. After all, this solution is used for monitoring and control in fleet management.
But make no mistake, the truth is that detailed tracking of your operation plays a crucial role in the effectiveness of demobilization.
It is also through a telemetry system that you can monitor the care of your assets, allowing you to extend their lifespan and further reduce your expenses.
Other possibilities of this tool that can help you with fleet demobilization are:
- Speed control: prevents accidents and further damage to the car, in addition to avoiding a lot of maintenance on tires, engine, brake problems and other repair and maintenance costs. After all, the more problems the car has, the more difficult it will be to sell.
- Group creation: You can create a “demobilization” group yourself within the platform, including all vehicles that need to be demobilized. It can, for example, filter all cars with more than 100 thousand km driven, thus helping in the operation, especially those with vehicles spread across Brazil.
- Average consumption reports per liter: It allows you to know whether the car is economical or not, a point that is highly considered when selling the vehicle.
- Shooting reports: theoretically, the more kilometers a vehicle has run, the more “used” the car will be and, therefore, the lower its selling price and the greater the difficulty in selling it.
Suggested reading: Telemetry: what it is, how it works, and its benefits for fleet management.
Furthermore, the telemetry system also helps to reduce the rate of undue journeys, as journeys outside business hours no longer occur and only those necessary for the company's activities are carried out.
This way, it is possible to understand how technology in fleet management can help you not only keep your vehicles in perfect condition, but also understand the best time to get rid of them without major financial losses.
Discover the potential of this tool and see what else it can do for your fleet management, such as reducing costs, increasing safety, productivity and much more:
