Expert Advice On Selecting Leases
Sunday, 30. October 2011
If someone does a particular job for a living and you need some advice related to the work he or she does would it not be a good idea to ask them for advice? For example if you weren’t sure how to record expenses in your books would you ask an accountant? Changing some taps in the bathroom, it might be a good idea to get some advice from a plumber. So when I read an article in Fleet news advising others on what to look for when deciding on the provider of your cars I thought it would be a good idea to share the thoughts of the many professionals that contributed, especially as their views endorsed what I’ve been saying for a long time.
The headline stated: Ignore price; focus on the value. The experts say that in the past too many fleet managers have focused too heavily on price and not enough on service and value.
The experts say you should place a high emphasis on supplier relationships and the service they provide. This is so much more important for small businesses and consumers who don’t have the experience of dealing with issues relating to dealers and finance providers.
When talking about the tendering process Carl Stephens of Venson Automotive Solutions said, ‘When scoring a tender response, price will be 25 – 40% of my scorecard in terms of capability.
Anyone who scores more than 50% for price – unless it is a very simple commodity – is missing a trick and making price too important. There are so many other things in supplier relationships that will be ignored by scoring price so highly.’
And he is a professional, the same applies, if not more so, to the smaller business or consumer. Stewart Whyte, MD of Fleet Audits, had a slightly different view by saying that if a company makes price the ultimate arbiter it should also apply the correct price weightings to all the options.
Fleet Audits include about 60 separate analysis lines when evaluating a tender on behalf of a large fleet, all weighted and scored in agreement with the customer in order to find the best solution and the best supplier.
The problem that comes through is the fact that price comparison is easy to measure so tends to be the default criteria when selecting a supplier when in fact other areas should be equally considered as a small saving in rentals could result in huge costs in time and money through the lessee not receiving accurate and professional advice.
The thing to remember is that whilst the finance is linked with the vehicle you cannot treat them as a package. The dealer and manufacturer are responsible for the vehicle, which is a commodity, whilst the finance is a more of a service and the responsibility of the funder.
You really need to use a professional that can deal with both areas – so say the experts. As Steve Whitmarsh, MD of RunYourCars.com, pointed out when summing up, ‘You generally get what you pay for, and if a supplier can significantly undercut its competitors there is usually a very good reason for it.’ Couldn’t put it better myself! By Graham Hill
