How to cut vehicle rental expenditure
The vehicle supply crisis has hit rental companies particularly hard, leaving them desperately short of vehicles. In some instances, major rental fleets have even been buying secondhand cars to supplement their vehicle numbers.
The result is a classic case of high demand and low supply, raising hire costs for business customers. To control these costs, fleet and procurement departments can try the following strategies.
1. Downsize hire vehicles
Company car drivers might want a like-for-like replacement when their own vehicle is off the road, but depending on the journeys they need to make, a smaller hire car may be perfectly adequate on a short-term basis. Likewise, if van drivers can carry out their operational duties with a smaller light commercial vehicle on a temporary basis, this can save significant sums in rental rates.
2. Make all company vehicles available
This is a challenge, especially for perk, management cars, but it makes little financial sense to have an office car park full of company-funded cars, while other employees hire a replacement car for the day. Treating company cars like corporate assets and making them available to all staff who need a hire car, can almost eliminate short-term hire needs, but you’ll need the support of HR to introduce the policy.
3. Encourage car hire sharing
If two or more employees are hiring cars to travel to the same meeting, encourage them to share one car, rather than each hire a vehicle. Having travel plans signed off by a senior manager, prior to travel, can bring some discipline to car hire sharing.
4. Avoid unnecessary charges
Additional charges for collection and delivery, or returning vehicles with only half a tank of fuel, can quickly inflate hire costs. Ensure employees collect hire cars from the hire station and deliver them back on time, and instruct them to refuel vehicles before returning them to avoid penalty fees.
5. Hire by the hour
Car sharing and car clubs now allow drivers to hire a vehicle by the hour, rather than for the whole day. Some operate on a subscription basis, with free-floating vehicles parked around a city; others can be dedicated to a business with a small number of cars parked at the workplace. Keyless entry and the ability to allocate hire charges to the individual driver or corporate department make this an easy solution to manage, and certainly much easier than running pool cars.