February 06, 2024by golfleet
Reading Time: 6 minutes

Fleet demobilization: what it is, how it works and when to do it 

Find out what fleet demobilization is, how and when to carry out the process, what the biggest challenges are and how a telemetry system can help you.

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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?

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What is fleet demobilization?

In short, fleet demobilization is the process of finding a suitable destination for the automobile when it is no longer useful in the company or has reached a high mileage, requiring increasingly expensive maintenance and repairs.

As a result, you are faced with some very significant challenges, how to keep a vehicle parked in the garage or pay for its expenses. In this sense, demobilization appears as an intelligent 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.

In addition to being a sustainable practice, demobilization can be a source of profit for fleet management. But in what way? The vehicles' destination may be for sale, depending, of course, on their condition, which represents an opportunity for financial recovery.

Suggested reading: Fleet maintenance plan: how to prepare and ensure greater safety in your operation

Fleet demobilization: what it is, how and when to carry it out | Golfleet

How and when to demobilize the fleet?

To ensure that the demobilization of a profitable fleet is a profitable process without negative impacts, it is crucial to take into account some aspects, such as costs, depreciation, contract time 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 to extend the useful life of your vehicles to the maximum, reducing the need to have one fleet demobilization after another.

Besides, Knowing when the useful life is coming to an end is another important factor in understanding when to start the process.

Diogo Ilha, CEO of motor market, a company that carries out the entire vehicle demobilization process – document management, car 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 driven is the ideal strategy.

Suggested reading: Light 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?

Firstly, it is necessary to assess the actual condition of the car. Dealerships, for example, They tend to buy pre-owned and used cars, but in good condition, or even, in rarer cases, cars that require small 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 they are exceeded, they begin the demobilization 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.

Fleet demobilization: what it is, how and when to carry it out | Golfleet

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:

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 is possible to assume that there are two major challenges when it comes to vehicle demobilization: understand the ideal time to disconnect a vehicle from operation and the correct way to do this.

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.

Fleet demobilization: what it is, how and when to carry it out | Golfleet

How does a telemetry system help with fleet demobilization?

Firstly, the idea of ​​how a telemetry system can help with vehicle demobilization may not make much sense. After all, this solution is used for monitoring and controlling 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 its useful life 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 how it worksbenefits 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:

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