Fleet Acquisition: How to Save Money With Factory Ordering

 

We know cost control is a big challenge.

So when it comes to buying fleet vehicles, how can you save money and still get what you need?

In this blog, we’re going to show you how you can spend less on vehicle acquisition. The key is to order from the factory, instead of buying from a dealer.

Here’s a look at why factory ordering leads to real cost savings.

FLEET MANAGEMENT TIPS: HOW TO PAY LESS FOR FLEET ACQUISITION

When you order from the factory, you will:

Get the exact vehicle you need

Get what you need, with no unnecessary extras, and nothing missing. Conversely, getting exactly what you need from a dealer is extremely rare.

This is because dealers order vehicles from the factory with a range of options they hope will sell. These are things like heated steering wheels, running boards, and tinted windows.

But what if you don’t want those options?

Well, if it’s the only vehicle on the lot, and you really need it, you’ll have to buy it, and end up paying for those options anyway. When you order from the factory, you won’t have to pay for any added features you don’t want.

Additionally, if your fleet needs pickup trucks or white vehicles, you’ll find there’s currently a shortage of models if you order from the dealer. This is because the summer is between model years, so stocks will be at their lowest until the fall.

(Related post: A Fleet Procurement Strategy to Boost Your Bottom Line)

Get the vehicle when you need it

Order the vehicle now, and have it delivered later, when you need it. For example, you can order in August, and get the vehicle in April, if that’s what makes sense for your fleet.

How does this help you save money?

Inventory planning. Ordering from the factory allows you to plan your fleet size. By knowing the exact day your new vehicle will arrive, you can make arrangements to sell your current vehicle based on seasonality peaks in the used vehicle market. You maximize your reselling return and carry less inventory.  

(Related post: 5 Pro Strategies to Improve Factory Order Fleet Delivery Times)

Give all drivers the same vehicles

When you can make sure all drivers have the same vehicles, you’ll prevent any conflict that may arise from one driver having a “cooler” vehicle than the others.

fleet-acquisition-fleet-management

Happy drivers are more engaged and productive, which—every fleet manager knows—is key to a healthier bottom line for your business

Get the vehicle delivered to your driver’s exact location—without the fees

If you order from a dealer, you’ll have to pay the transport and dealer trade fees when they deliver to a specific location. Ordering from the factory eliminates these fees entirely.

Get locked-in pricing

This means, when you order from the factory, the OEM’s pricing is locked in to the date your vehicle was ordered. Vehicles from the dealer are subject to current pricing, and prices don’t go down during the model year—only up!

Enjoy lower markup on a factory order

Dealers charge you more because they have to pay for advertising and interest on the vehicle. When you order from the factory, you won’t have to pay for either of these.

Enjoy overall lower acquisition fees

At the end of the day, dealers need to make money on the vehicles they sell. If you order from the factory, there are no related dealer fees. Factory ordering is immediately cheaper because of that one difference.

The average vehicle purchased out of dealer inventory will cost you between $750 to $1,000 more than a factory order for the same driver requirement.

Do the math with your own fleet: the savings are huge.

(Read more: These Experts Share How to Better Cycle Your Fleet [Interview])

When Should You Order Your Fleet Vehicles?

To save the most money on your factory order, while maximizing your vehicles’ remarketing value, here’s what your ideal order cycle should look like:

(Related Post: How to Better Plan Your Factory Orders)

Should You Ever Buy From a Dealer?

There are times when buying a vehicle off the lot does make sense.

Let’s take a look at the most common scenarios:

  • When you have a vehicle that becomes a “total loss” due to accident or a serious maintenance issue
  • When you have a new hire you have to put on the road right away

In these situations, you’d need to buy and receive a new vehicle as soon as possible. And through a dealer is the best way to do that.

But, remember:

Buying from a dealer should be the exception, not the rule.

How Can a Fleet Management Company Help?

A fleet management company (FMC) can work with manufacturers to manage your factory order fleet for you. They can help you choose the right vehicle that supports your unique needs—at a good price that also provides the highest return. Also, in the event that you need a last-minute vehicle from a dealer, an FMC can work with “fleet minded” dealers to help minimize any extra costs.

Final Thoughts

We hope this article has helped you understand the key cost-saving opportunities that come with factory ordering. At the end of the day, you need vehicles. So why not get the exact ones you want, when you want them, for less money?

Next Step:

Download Factory Ordering: Purchase the Options Your Fleet Requires, For Less. It will help you learn how to plan your factory ordering for maximum savings.

Article by Jennifer Chapman

Factory Ordering for Savings

Should you buy your fleet from a dealership or order from the factory? 

Ordering company vehicles from the factory offers key advantages, including better pricing. But it requires advance planning and limits your flexibility.

This paper explains the many factors that should be considered when purchasing your fleet.

Download Now

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