Q: How can I get my out-of-service vehicles back into service quicker?
- David Allen, Hertz Car Sales — Pasco, Wash.
A: We are amazed, almost daily, at how many rental companies have vehicles sitting at dealers, auctions and repair shops for weeks. No one seems to know when the units are coming back, being sold or why they are still not in service. It often turns out some are waiting for parts, some are awaiting approval for repairs and others are waiting for the repair shop to get to the car. Some cars are even sent to an auction or consigned to a dealer and then forgotten.
A $20,000 vehicle depreciating at 2% per month costs you $13.33 a day plus interest, overhead and insurance. So if you have a car waiting for parts at a dealer for two weeks, it costs you at least $187 to more than $400. If you are running at 80% utilization and averaging $30 a day, we are talking about another $336 in revenue you are missing.
So what do you need to do to reduce your costs?
1. Someone has to be in charge of getting your vehicles back in service as quickly as possible.
2. Your employees need to know that out-of-service cars cost the company money — and that is not in their best interest.
3. Catch the problems early. Proper maintenance and inspection can prevent a minor problem from becoming a major problem. Train your people on what to look for.
4. When a vehicle goes out of service, all the appropriate information needs to be recorded in your rental software and the vehicle’s jacket. If your rental software does not support this, you should have a “currently out-of-service folder” with all the information in it.
The basic information should include the unit number, make, model and vehicle class, where it is, why it’s there, when it went there, estimated time until return to service, contact name and number, who approved it and who entered the data. Any additional notes should accompany the record, such as waiting for parts or insurance company approval, etc.
5. Everyone who needs to know should be able to collect this data and enter it properly.
6. If the car is at a sale you need to know when the sale is running. Cars sell better at auctions if you have someone on the block representing your car.
7. Every morning it should be one person’s job to review the status of every out-of-service unit. The vendors should be called and asked if the vehicle is ready to be picked up. If additional problems have been discovered, the records need to be updated and the estimated return changed.
If the unit is waiting on an insurance estimate, call the company and get them to commit to a time. If it is a new car and the dealer is having problems getting a part or they are taking forever on a warranty repair, you should contact your fleet supplier to see if they can help. The fleet supplier has a relationship with the manufacturers and can often get things expedited.
If a repair shop is taking forever, you may need to have a talk with the owner or find another vendor. If a car is at an auction or dealer for sale, find out if it sold. If not, decide if you need to pick it up or run it again.
8. Review all your out-of-service units each quarter. Do some of your vendors take forever to repair your units? Maybe you need a new vendor. Someone may offer you great rates, but if they take twice as long it may not be a bargain.
Are there particular makes and models that are often out of service? Maybe they need more regular checkups. Maybe a specific problem crops up after so many miles. Maybe this car is not the best one for your fleet. Are there certain customers who are causing out–of-service problems? You might want to restrict which units are available to them.
Out-of-service vehicles are a part of the rental business. If they are properly managed, they are just part of the everyday business process. If you do not manage them, they will cost you a lot of money.
Email your fleet-related questions to Auto Rental News: [email protected]; or directly to Eckhaus Fleet at: [email protected]. Eckhaus Fleet is one of the largest independent fleet suppliers to the car rental industry.
You can read more articles here from the November/December magazine issue from Auto Rental News.