8 sep 23

Replacement car costs: room for improvement

The cost of replacement vehicles is often higher than expected and overlooked in the bigger picture. In other words: there’s room for improvement here.

How? Here are six strategies to consider.

Downsize models

The car you want is more expensive than the car you need. Downsize the model categories your policy allows, and for example, only approve large (E) cars where luxury (F) ones were okay, or impose small (B) cars where medium (B) ones used to be the norm. 

Limit your suppliers 

As is the rule for your regular fleet, so it is for replacement vehicles. Fewer suppliers means you have a better overview, and because of greater volume per supplier, a better negotiating position. Use it to obtain discounts and other cost advantages. 

Use your own fleet

It may require some fine-tuning of your car policy, but it may be possible to maximise the usage of your own fleet so that short-term needs are met without inconveniencing any of the existing beneficiaries. 

Eliminate perks

Rental car perks come at a cost: on-site delivery and collection of rental cars, for example, or not returning a vehicle with a full tank. So, review and eliminate where possible.

Dynamic pricing

Car rental companies typically use dynamic pricing to maximise their turnover. Fleet managers can use this algorithm to their advantage by planning bookings when peak-time charges are at their lowest.

Monitor usage

Relatively simple telematics solutions can be used to monitor usage, distance, speed and driving behaviour, also for rental cars, helping fleets to optimise costs. 

Read more about cost savings in our E-Book 

Authored by: Frank Jacobs