Here are four ideas you can use today to drive profits to your bottom line.

1. Base fleet purchases primarily on projected holding costs.

Mike Kulp

Kulp Car Rentals, Gilbertsville, Penn.

Kulp Car Rentals has instituted a policy of making all fleet purchases based primarily on projected holding costs of the vehicle. Our goal is to depreciate the rental fleet at the rate of one percent per month, and still sell the vehicles at a gain. In 2010 the actual monthly cost of depreciation on the 341 fleet vehicles we sold was .87 percent.

Before a vehicle is purchased for the fleet, we determine that vehicle's MMR (Manheim Market Report) value for one-, two- and three-year-old models. This is used to determine the estimated residual value of the vehicle. Based upon the current acquisition cost and estimated residual value, we will purchase the vehicle if it meets our 5-percent per-month budget.

In order to maintain this depreciation rate, we purchase based upon vehicle availability and market conditions. In Nov. and Dec. 2010 and Jan. 2011 we bought more than 200 vehicles because the cars were available at the right price, not because we thought we needed that many for rental.

Since the summer of 2008, we have also sold off all of our larger SUVs and bought only fuel-efficient fleet vehicles. We believe that gas prices will again climb to rates that will significantly impact the value of larger, less fuel-efficient vehicles. Although we could have rented these vehicles at a higher rate than our current fleet vehicles, we did not purchase them because of our estimate of their residual value.

In summary, the driving factor in fleet purchase decisions is not the vehicle's rental rate, or the type of vehicle to rent-it is whether the acquisition cost will allow us to keep the depreciation cost within our budget.

2. Get "free" money for training.

Jack Vercollone

Verc Car Rental, Southeastern Mass.

For the last 10 years, we have received more than $100,000 in training from three separate grants from our state's (Massachusetts) Workforce Training Fund. The training was for selling extras, computer training, supervision techniques, customer service and operations management.

Grant funds were matched, dollar for dollar, with company money, either cash or in kind.

Our match was met by paying employees while they trained. The company chose a different trainer for each type of training.

Training can be spread over two years, minimizing disruptions during busy season. The Training Fund comes from every company's unemployment tax contribution. If you are going to have to pay it, you might as well get something back!

Most states have the same or similar training grants available.[PAGEBREAK]

3. Track historical fleet data per model for better cost control.

David Wilson

Dollar Thrifty licensee, Nashville, Tenn.

Which model costs more in fleet, a Toyota Corolla or a Toyota Avalon? Is it really more cost effective to hold cars longer? By analyzing actual historical fleet data by model, we've found that the real-world numbers sometimes fly in the face of conventional wisdom.

We keep an Excel spreadsheet of our fleet that tracks each car's purchase price, sale price, months owned, miles per month, ending miles, monthly and total depreciation, cost per month and cost per mile. With this data, we aggregate car costs by car sizes, hold times and total miles. By analyzing cumulative data for a particular model, we can pinpoint the optimal time to sell that model.

We've found in some instances that it is more cost effective to sell our big cars-which accumulate miles quicker-within a shorter hold time than our small cars. This actual data guides our fleet purchases and sales to wring the most cost savings out of each unit.

In the enclosed snapshot of Toyota Avalons, the 2010 models were held for 9.6 months and incurred an average cost of $423 per month. The 2011 models, however, were held for 7.1 months on average, yet incurred only $292 in cost per month. The 2011 Avalons' average holding cost is much less than for our Corollas, which were held for 14 months on average at an average cost per month of $352.

4. Winner! Use your screen saver to motivate employees.

Brenda Albright

Discount Car and Truck Rentals, Riverview, New Brunswick, Canada

Are you pulling your hair out over employees that forget to do simple tasks?

Why not take advantage of some simple technology that will cost you absolutely nothing? Use the "rolling marquee" feature on your screen saver to get a message across to your staff.

Set the marquee to come on after a minute of inactivity and they'll be aware of it all day long. When you think they've got the message, change it to something else.

Even the most forgetful employee can't use the "Oh, I forgot" excuse with this simple, easy-to-implement reminder and motivational tool. Best of all, it's cheaper than string on a finger!

Here are some of the messages we have used:

● Have you sent in a lead today?

● Use the proper source code.

● Vehicle Licensing Fee

● Remember the Fuel Purchase Option.

● Utilization

● Have you ASKED for the rental?

This screen saver has been our favorite by far. This was created by converting a Flash display to a screen saver using free software available from instantstorm.com in conjunction with the rolling marquee that is standard in Windows.

This screen saver has been our favorite by far. This was created by converting a Flash display to a screen saver using free software available from instantstorm.com in conjunction with the rolling marquee that is standard in Windows.

About the author
Chris Brown

Chris Brown

Associate Publisher

As associate publisher of Automotive Fleet, Auto Rental News, and Fleet Forward, Chris Brown covers all aspects of fleets, transportation, and mobility.

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