Once the funding has been arranged, the running costs are the next phase in the vehicle life cycle. Operational considerations include insurance, fuel, maintenance, winter/summer tyre changeovers, breakdown recovery, and the handling of any repairs, accidents and possible claims as well as parking tickets/fines. In a buying scenario you will either have to manage all these yourself in-house – such as by issuing company credit cards or reimbursing employees for fuel costs – or outsource them to a supplier – perhaps your local dealer for maintenance and repairs, and your existing broker in terms of insurance, accident management and claims handling.
However, this aspect of the TCO is often underestimated. Irrespective of the number of vehicles, efficiently managing them involves a considerable amount of work; all these activities require time to find the right supplier, negotiate the right price, to scrutinise incoming invoices and pay them on time, and this can place a significant burden on your fleet manager or administrative department.
In an operational lease setup, the lease company takes care of managing all the operational services, allowing you to focus on your core business. As a guaranteed cost component within the lease agreement, maintenance – including both preventive and unscheduled maintenance as well as roadside repairs – is carried out throughout the vehicle’s useful life by an approved supplier, based on service level agreements (SLAs) and approval processes for the work that needs to be done. Tyre changeovers are likewise included in the lease instalment and performed at approved garages with SLAs, and additionally eliminate the problem of storing the spare set of tyres. In terms of fuel, each lease driver receives a fuel card (available in various options) offering good coverage and potential discounts, plus the lease company can provide fuel reports that give you insights into consumption, costs and related CO2 emissions.
Insurance is another fixed cost component, precisely aligned with the start and end date of the lease contract, as is claims handling, breakdown recovery and accident management (including a replacement vehicle). All of this minimises downtime and offers process efficiency gains for you as a lease customer.