10 Tips for Fleets to Cope with Vehicle Supply Shortages

Fleet decision makers need to be agile in their policies and strategies to keep their business wheels turning amid a new vehicle supply shortage.

1. Contract extensions

With new vehicle lead times stretching to 12 months or more, fleets are delaying remarketing vehicles they own and working with leasing providers to extend contracts until replacement vehicles are available. Formal contract extensions should significantly reduce monthly rents.

2. Manage maintenance costs

Keeping vehicles for longer periods and with higher mileage means fleet managers must focus on service, maintenance, repair and tire costs, controlling expenses as vehicles age and become less reliable.

3. Let drivers order cars ahead of time

Companies are opening their option lists to company car drivers several months in advance, typically nine months before a vehicle is due to be replaced, so that orders can be placed as quickly as possible.

4. Communicate with drivers

Fleet departments are coordinating with HR departments.

5. Expand company vehicle choice lists

Company vehicle choice lists are becoming more flexible, with employers offering drivers a wider selection of manufacturers in an attempt to work with suppliers that have shorter lead times. Reducing rebates and rebates, as demand for new vehicles outstrips supply, means a greater variety of suppliers is no longer necessarily more expensive than channeling procurement through a limited number of OEMs.

6. Be flexible with vehicle specifications

Fleets and drivers are also having to be more flexible about the specs they expect in their new vehicles, as semiconductor shortages force automakers to eliminate certain standard options in a bid to keep their production lines moving.

7. Keep the vehicles at the end of the contract

Larger fleets are choosing to keep vehicles at the end of the contract, even when new replacements arrive, rather than sell or return them to the leasing company. These older vehicles are then used as carpools and vans to provide coverage for fleet vehicles that are off the road for maintenance and repair, or to provide mobility for new recruits until a permanent vehicle becomes available.

8. Don’t discount crashed vehicles

Fleets are challenging insurers’ decisions to write off, rather than repair, crash-damaged vehicles. With a shortage of replacement body panels and mechanical components, insurers say a growing number of repairs aren’t cheap, but for fleets that urgently need vehicles, waiting a month or two for a repair makes much more sense than waiting. 12 months for a new vehicle. .

9. Plan for peak periods

Forward-thinking fleets are already informing the rest of their businesses about vehicle shortages and how this could affect high seasonal demand, such as pre-Christmas deliveries. Planning ahead means businesses can reserve short-term rental vehicles in advance, or even change the type and size of vehicle they use, to keep staff and loads mobile during peak periods.

10. Forecast future demand

Fleet operators have to become commercial forecasters, placing orders for vehicles that may not be delivered for another 18 months. Ordering vehicles during this time period means anticipating demand: how big will the business be, how many and what type of vehicles will it need? Playing it safe by simply placing orders to replace similar vehicles can restrict the growth of a business.

NOW READ: How leasing companies are helping customers deal with supply shortages.

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