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Smaller fleets not recognising benefits of TCO approach

The annual fleet research interviewed more than 4,500 fleet decision makers in businesses of all sizes and across 15 countries. The table pictured demonstrate the most important criteria to respondents when choosing a company vehicle.

It clearly shows that cost is at the top of the agenda although smaller and medium sized businesses are interested in the purchase price (or lease rental of the vehicle) whereas the largest businesses take a more pragmatic view based on TCO.

As TCO includes areas such as depreciation, maintenance, fuel, insurance tax and administration, it provides a much more accurate view of the cost of a vehicle than the up-front costs in isolation.

Mike Waters, senior insight & consultancy manager at Arval in the UK, commented: ‘Irrespective of the size of the company it is important to effectively manage vehicle related costs. To do this, we would always advocate looking at the full range of costs and therefore it seems that many businesses need to change their approach in order to make cost effective decisions.’

He added: ‘Most smaller and medium-sized businesses and an increasing number of large companies don’t have a dedicated fleet manager and often don’t call upon the support of a leasing company. This is definitely a contributing factor to the method that they take and shows how calling upon some fleet expertise, and getting solid practices in place, could save them money in the longer term.’

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Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.