Fleet managers are always looking for solutions that efficiently reduce the costs of operations, thus fleet outsourcing emerges as one of these possibilities. But is it the ideal option for all types of companies?
There are many factors to consider before choosing between owning a fleet, leasing a fleet, or subscribing to a car rental service , as making the wrong decision can directly affect the results of a company that needs the fleet to operate its services.
Read more: Tips to enhance your control of light vehicle fleets.
If you have any questions and feel that fleet outsourcing may be the best choice for your business, continue reading to understand the reasons why companies hire fleets and what you need to know to understand if this is the right choice for you. .
How do I know if fleet outsourcing is for my company?
Opportunity cost
Review of acquisition costs on each purchase
Loss reduction
Vehicle depreciation cost
bureaucracy expenses
Maintenance costs
insurance cost
Interval between car purchase and delivery
Administrative costs
Main advantages and disadvantages of fleet outsourcing
To help you understand why companies choose to outsource fleets, you also need to understand the advantages and disadvantages that this type of fleet can add to your business. Check it out:
Advantages of fleet outsourcing
Among the main advantages that lead companies to outsource their fleets, we highlight:
- Reduced costs: Fleet outsourcing is more cost-effective than owning and maintaining your own fleet, as it removes the need to invest in vehicle acquisition, maintenance, insurance and other taxes.
- Flexibility: adaptation also occurs easily in leased fleets. After all, if there is an increase in seasonal demand, for example, it is possible to hire more vehicles for the fleet in this period of time. Or even, in cases of economic recessions, it is possible to operate with a smaller number of vehicles to reduce operating costs.
- Business focus: with outsourcing, it is possible for the company to focus on other activities, since the operation and management of some parts of the fleet are in the hands of the outsourced company.
- Efficiency improvement: Fleet outsourcing companies tend to invest in high-performance technologies and advanced methods to optimize management and ensure the efficiency of their services.
- Less liability: finally, by outsourcing your fleet, your company also transfers part of the responsibilities to the contracted company, such as accidents, fines and other claims.
Read more: Accident: how it impacts your fleet management
Disadvantages of fleet outsourcing
But, while all the previous advantages are included in your company with fleet outsourcing, it is important to be aware that some disadvantages can also be present. Are they:
- Loss of control: By outsourcing the fleet, your company may lose some control over the use of the vehicle and the quality of services provided. For this reason, it is essential to pay attention to car rental companies in the market that have proposals to solve this type of problem.
- Difficulty in communication: communication between both companies can become a problem, which is capable of harming the coordination and management of the fleet and the company's own operations.
- Confidentiality: maintaining confidentiality is even more difficult with an outsourced fleet, even more so if the contracting company is concerned about the security of sensitive information related to its business and the places the vehicles visit.
- Variable Quality: As you have already noticed, the quality of rental companies can also vary, which, consequently, also directly affects the image of the company. This shows the importance of having social evidence and analyzing cases of potential contracted companies to prove market authority and service quality.
- Contractual complexities: the contracting company needs to manage a contract with the contracted company, which can be complex and require additional resources along the way.
How do I know if fleet outsourcing is for my company?
By analyzing and putting the advantages and disadvantages of outsourcing a scale, we can understand whether or not an outsourced fleet is what we want.
However, several factors need to be considered to determine if a third-party fleet is what the company needs . Read on:
Evaluation of acquisition costs
When we evaluate the cost of acquiring a vehicle, it is important to consider, in addition to the face value of the purchase, the method of payment. After all, buying a car always involves other costs, whether financed or not.
That said, financing interest refers to the amounts charged by the financial agent (bank, finance company, among others), for the advance of capital for the purchase of the good.
In addition to the interest rate applied, some tax charges are also added to the monthly installment amounts, such as the IOF and other service fees such as the TAC (Credit Opening Rate).
Given this, the cost of acquiring new vehicles is considerably high , making fleet growth even more difficult, for example. Fortunately, all of this can be solved by outsourcing fleets for a much lower cost.
Opportunity cost
Even if your company decides to acquire vehicles with its own resources and not finance them, this purchase generates costs that need to be considered.
This is because the resources allocated to purchasing vehicles could be used directly in the company's own production chain or in optimizing its services to maximize its results. This is known as opportunity cost.
Therefore, it is worth stopping, analyzing and thinking about what your company also loses when purchasing this vehicle.
Review of acquisition costs on each purchase
It is common practice for companies to adopt a permanent asset acquisition policy and go years without revising it. This is a huge mistake, as direct purchase and lease prices are very volatile and depend on many factors.
Not to mention that it's necessary to consider that the company may have a greater or lesser opportunity for return in short periods of time . All of this must be considered when evaluating the acquisition costs of the assets and determining whether outsourcing is necessary.
Loss reduction
Another important factor in this decision-making process is calculating how to minimize losses.
That is, if the company in question is generating losses, it is possible to think of two situations:
- How much did this capital help to minimize the loss?
- Is it possible to settle a credit line with this material?
If the answer is yes, the cost of the credit line can be used in your calculations as an opportunity cost.
Vehicle depreciation cost
Another crucial factor to consider when choosing between owning or leasing a fleet is the cost of vehicle depreciation over time . After all, no matter how well cared for they are, they will not have the same value as when you acquired them, which is called depreciation.
Therefore, when you outsource your fleet, the rental company is responsible for this cost, not your company.
bureaucracy expenses
Certainly the costs with taxes and annual fees for vehicle documentation and licensing are of great importance when making your choice. These costs, when outsourcing the fleet, become the responsibility of the contracted company.
Maintenance costs
As we saw earlier, maintenance costs are another expense that is no longer your company's responsibility and should therefore be something to consider.
We know that new vehicles do not tend to have high maintenance costs, but it is important to understand that this value increases over time, as well as the chances of damage to parts and the vehicle itself.
Read more: How to develop a fleet maintenance plan and ensure greater operational safety
insurance cost
If you don't outsource your light vehicle fleet, each vehicle will, of course, need insurance. Imagine a cost of R$ 1.500,00 per year; your company will have at least R$ 4.500,00 in expenses per vehicle at the end of the 36 months of use.
This could be easily resolved by outsourcing fleets, as this cost is also the responsibility of the rental company.
Interval between car purchase and delivery
When we purchase a brand new vehicle, there is an interval between the date of payment and delivery, depending on billing, documentation and freight.
That being said, it's important to remember that, during this time frame, your company has already paid for the vehicle but cannot use it, which can delay your operations. Similarly, at the end of the vehicle's life cycle, the process of selling and decommissioning the vehicle is also time-consuming, resulting in a vehicle sitting idle in your company's yard, unused.
Like it or not, all of this implies costs for your company, which must be considered in the acquisition cost.
Administrative costs
Finally, not outsourcing a fleet demands time, dedication and productivity from your administrative teams so that everything works well and properly from the first quotation for the purchase of the vehicle until the moment of sale.
That said, how many people are needed and how much time do they dedicate to managing fines, documents, purchase and sale negotiations, maintenance, claims and everything else that is connected with your fleet?
Finally, considering all the factors mentioned above , it becomes even clearer that calculating the cost of a vehicle fleet goes far beyond the purchase price. In most cases, after a personalized and in-depth study of each company's characteristics, it's possible to conclude that outsourcing a fleet of light vehicles is much cheaper.
To take your fleet management even further , check out our free, professionally written eBook on everything a fleet manager needs for more economical and efficient management :
