28 May How much does it cost to outsource company car fleet management?

Primarily – your return on investment

It is important to understand that as with any business process outsourcing model, outsourcing fleet models are designed to deliver a positive return on investment for the client, through a number of factors.

Most prominently, this will include the headcount that you currently have invested in the day to day operation of your fleet, whether as FTE’s or more likely, as a significant portion of the roles of various stakeholders across the business.

Additionally, this will include the burden on central functions in measuring and managing the supply chain and the collation of critical data from it, for purposes such as Financial and CSR compliance reporting.

Add to this the task of evolving policy to meet contemporary norms and maintain recruitment and retention, you will quickly recognize that in terms of headcount alone, the opportunities for delivering a return for your investment are quite significant.

Thus, the result should be a positive figure for you, but nevertheless, there will clearly be an investment required on which to make that return, and that will depend on some variable factors.

What are the variables

As you might appreciate there are a few variables at play here, beyond the ‘number of cars on fleet’ that one might ordinarily expect to be the key dynamic.

The core element that drives the pricing, from the customers’ perspective, is the complexity of the supply chain. This in turn contains several elements, relating to the number of countries, number of business entities, the number of suppliers in each market, and even down to the funding types used and supplier services taken in some cases.

The fleet dynamic, i.e., number of cars, however, does come into play when we are considering the governance measures that are necessary to deliver both policy compliance and compliance to the supplier commercial terms. If these services are to be part of an outsource program, then they of course need to be resourced and accounted for in any outsourced service model.

The numbers of transactions will, in turn, be influenced by the replacement cycles of the vehicles concerned, with both ‘new orders’ and ‘off-hires’ requiring their own governance processes for adherence to the contracted commercials.

So, in summary, both the complexity of the supply chain and the size of the fleet affect the pricing for fleet outsourcing.

Pricing range

In terms of price range, the least complex fleet with few suppliers, longer replacement cycles and a very straightforward policy and supplier commercials could be less than €5 per vehicle per month. On the other hand, where fleets are more fragmented and policies more complex to administer, costs might be nearer to €10 per vehicle per month, even where fleets are quite large in scale.

Contact Graham Rees to understand how much it might cost to outsource your company car fleet.