From our conversations with fleet managers and procurement officers, we know maximizing fleet residual value is always top of mind for them.
We often hear, "How do I get the most money back when I go off lease?"
For open-lease agreements, the risk is completely in the hands of the lessee. Therefore, it's important to proactively manage your fleet to get the highest value on reselling.
One often overlooked area is how emphasizing driver safety can improve reselling returns. If drivers are kept safe on the road, that means vehicles are kept safer.
As a result, vehicles maintain their condition which makes them a more attractive purchase.
So here are the tips we give our clients when they ask for advice on maximizing residual value. Our main advice? Always put safety first!
FOCUS ON DRIVER SAFETY TO BOOST YOUR FLEET'S RESIDUAL VALUE
By following a vehicle maintenance schedule and educating your drivers on safe driving best practices, you'll increase your fleet's reselling value and make more money.
Here's how to get started.
Get the brakes serviced regularly
A study done by the U.S. Department of Transportation found that brake failure accounted for 25% of accidents during a two-year period.
That's a scary, but preventable statistic.
For fleet vehicles that are driven regularly, it's important to get the brakes serviced twice a year: going into winter and coming out of winter. This action will make sure any brake issues are addressed quickly, before disasters like brake failure can occur.
Also, let drivers know to listen for any unusual sounds coming from the brakes while driving. Brakes will make noises when something is starting to go wrong, such as squeals, clicks, grinds, and squeaks.
As with many things in life, the best solution is prevention.
To keep brakes healthy, have your drivers avoid sudden stops and turns, excessive speeding, and riding the brake.
Giving proper care and attention to the brakes in your vehicles will make them last longer, helping you to avoid accidents and costly vehicle damage.
Do consistent tire maintenance
The same study by the U.S. Department of Transportation showed that tire failure accounted for 43% of accidents during the same two-year period.
Rotating tires regularly will help prevent tire failure, and will also extend the life of your tires by slowing wear. Tires on fleet vehicles should be rotated every 6 months or around every 12,000 kilometres.
Having a consistent schedule for checking tire pressure will also help prevent a blown tire. So ensuring all vehicle tires have the correct pressure avoids over-inflation or under-inflation, leading causes of tire failure.
As a fleet manager, you know that your drivers are often on a tight schedule, and need to get where they need to go quickly.
As a result, they may end up driving in less than ideal conditions. They also may have issues like road hazards to contend with. So it's important to be proactive in regularly checking tires for damage from these hazards, as well as from everyday driving impact.
Implement safe driving guidelines
From many years’ experience, we know that driving in winter takes a whole different skill set than driving in spring, fall, or summer. We're sure you'll agree.
Which is why it's crucial to communicate seasonal driving guidelines to your drivers.
Tips like driving slower, leaving plenty of distance between cars, and giving ample notice to other drivers are useful year round. However, they take on extra importance in the winter.
In addition, ensure all fleet vehicles are fitted with winter tires, which grip the road better and shorten stopping times, helping to prevent collisions.
Finally, creating a safe driving policy for your drivers will help curb distracted driving, which is a leading cause of accidents.
How all this translates to a higher residual value
By focusing on driver safety, your vehicles will be kept safe and maintained as well.
This means less damage, less wear and tear, and less likelihood of collisions.
It’s important to know, even if a damaged vehicle is repaired, there will still be a record of the original damage, so the reselling price will still be less than if it had never been damaged at all. Not to mention the costs of repairing the damage in the first place.
The FossFleet Advantage
The FossFleet management tool will help you keep your vehicles maintained on schedule. Alerts based on manufacturer specifications are sent out regularly to remind you to get your vehicles serviced.
In addition, when the time comes to go off-lease, your fleet management report will accompany the vehicle when it's resold, giving potential buyers the details and history of your vehicle's maintenance.
Our research has shown that fleet vehicles with this report sell for higher than vehicles without.
If procurement officers and fleet managers want to maximize fleet residual value, driver safety is a great place to start. If you keep your drivers safe, your vehicles will hold their value for longer, translating to a higher residual value.
Focus on regular vehicle maintenance, like brakes and tires, in addition to communicating safe driving policies to your drivers. Take advantage of your fleet management tool to curb unsafe driving, and use the report as supporting documentation when you resell your vehicles.
If you take these actions, you'll be able to sell your fleet vehicles for maximum value, which translates to a healthier bottom line for your business.
Article by Grant Chitty