With leasing costs under pressure, now is the time to switch your fleet to panel funding

With leasing costs under pressure, now is the time to switch your fleet to panel funding

Posted by

Robert Wentworth-James

June 2022

When leasing costs are under pressure, we strongly urge businesses with large fleets of vehicles to consider switching to panel funding. It’s like having your cake and eating it….

Traditionally larger companies have used one of two methods to source contract hire. Either they’ve aligned with a single contract hirer, which means they get simple administration and hope that by putting all their leases with one supplier they get a better deal. Alternatively, they have used several contract hirers, which gets them the best lease rate on the day but has the downside that their finance team won’t like the extra administration that inevitably comes along with it.

This is where Fleet Alliance comes in and can offer the best of both worlds – enabling you to ‘have your cake and eat it’. This is especially important when the variation in lease costs is at its most pronounced with regard to Electric Vehicles (EVs).

We get it, you don’t want to go out and get a comparative quote for every vehicle you are about to order, and you can’t be sure that any external supplier isn’t quoting low, just to get themselves onto your favoured supplier list; our unique Panel Funding approach provides the answer. We competitively tender every lease quote across a panel of 3-4 of the UK’s most competitive contract hirers. This guarantees you get the lowest cost. Every time.

 

Addressing internal fleet admin

If you’re wondering how our ‘broking’ strategy helps with internal fleet administration, let me explain.

As the UK’s leading independent fleet management specialist, we offer a single source of administration and have developed our own bespoke mobile and desktop technology to support your drivers in their desire to self-serve and access a solution immediately. The clever part of our offering is the management wraparound of administration and driver contact that provides the best of both worlds: it’s a case of access to the best market rentals on the day, combined with the administration advantage of dealing with only one company. This benefits your legacy fleet, not just the new fleet under Fleet Alliance.

To put this into context, on a fleet of more than 300 vehicles, you’d probably expect to see an internal administrator working full time on that fleet. However, with our supporting ‘Fleet Team’, our technology with e-Fleet and e-Fleet Mobile, the internal administration can diminish by up to 80%, freeing up the administrator’s time for other core activity within your business. And that’s all that’s required, other than having a contract manager to ensure we are performing as we said we would; reducing costs, providing outstanding service levels, delivering proactivity and innovation in how your fleet is managed.

In addition, Fleet Alliance will also manage specialist subcontractors when required – such as accident management, fuel cards, hire companies – and each of these are dedicated to reducing fleet costs through additional efficiency, whilst improving vehicle uptime.

 

Panel funding and EVs

The importance of using a panel of funders is more important now than it has ever been with the increasing take-up of EVs. Whilst we use a panel of 8 of the UK’s best funders, not all share the same attitudes towards the residual values of EV / PHEV. This means the difference in lease rentals between funders can be truly staggering. We’ve seen a difference of up to £200 per month between the highest and lowest quoting panel funders…. great news if you are at the lowest end of quoting, but not so good if your supplier is currently at the higher end of those lease costs.

However, there’s another key strength. Competitive commercial tension is ongoing between the panel funders, and not just at the time of winning the contract. This is different from sole supply which often sees ‘rental creep’ over time when a solus supplier is faced with an obvious lack of commercial tension, and the opportunity to massage margin just becomes too great. For instance, over the past 12 months, we’ve made an average 9.2% saving for fleets against legacy sole supply. This saving is further increased, the greater the level of choice the driver has within their fleet policy.

In general, for each client we choose a panel with a maximum of three to four funders, including the legacy funder – because we want to include the former partner where possible as this guarantees ongoing cooperation under the new arrangements. We don’t believe things need to change too much for the legacy funder, just because you’ve chosen an independent management specialist to manage and bring greater dynamism to your fleet.

So, there you have it, with Fleet Alliance, you’ll have constant access to market-leading lease rentals, but we also offer the wraparound of simplified administration with supporting technology of e-fleet and e-fleet mobile, to help in the management of the fleet and to support drivers in getting to their required solution instantly.

 

How do we guarantee we can deliver a better service to you and your drivers?

We offer you a completely independent single-source management of the contract hirers, rather than having one contract hirer managing a rival, which is what you’d get from moving from one sole supplier to another. Our solution guarantees there are no conflicts. And here’s the really important part – as our client, you don’t have to wait three to four years to get all your fleet under one management umbrella, unlike with moving from one contract hirer to another. We offer an instant benefit to your whole fleet, not just the new fleet going forwards.

Furthermore, with Fleet Alliance, your drivers aren’t disadvantaged from a disinterested legacy supplier because it becomes our responsibility to manage them, or manage them out; and stakeholders have visibility over their entire fleet on e-Fleet – rather than using two systems (the legacy system and new supplier system). Our IT systems are under constant development and investment thanks to a team of in-house developers. I’m particularly excited about some of the new app features being developed for later this year which will ensure that we remain ahead of the curve.

As the cost of living continues to bite, we are aware that businesses are looking for opportunities to get more productivity out of a more limited resource. For those businesses, that currently lease through a single funder, now is the time to make savings, reduce administration, gain greater proactive support and improved fleet visibility through our online tools and the support offered by our great fleet team.

It’s time to have your cake and eat it. Hopefully, it’s a no-brainer…

 

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