This article was first published in the IPWEA newsletter in October 2015.
An IPWEA survey has discovered just 25 per cent of respondents are replacing their light fleet vehicles at the optimum time, collectively wasting thousands of dollars each year.
The Light Vehicle Fleet Changeover Survey opened in July following a flurry of discussion on the Institute’s Ask Your Mates online forum about light vehicle changeover policies.
Of the almost 100 respondents who completed the 10 question survey between 1 – 9 July, 96 per cent worked in the public sector, with council policy listed as the predominant driving factor in fleet changeover decisions.
IPWEA executive officer Ross Moody said although the Institute had published guidance on the optimum changeover for light vehicle fleets including in its best practice Plant and Vehicle Management Manual, many organisations were continuing to change their fleets over too early or at too few kilometres.
“We’re still finding people tend to copy their neighbour instead of using proper analysis or they adopt a policy and leave it for years without review,” he said. “We know only a relatively small percentage of people are actually changing over at the optimum time.”
The survey identified half of the respondents were changing their light vehicle fleet over at three years or at 80,000km- a timeframe and distance fleet strategy specialist Grant Andrews said was far too early.
Mr Andrews will be presenting IPWEA Plant and Vehicle Management Workshops around the country from which will feature information on how to drive down light vehicle fleet costs.
Mr Andrews said advances in vehicle reliability and a low resale value for vehicles meant the optimum changeover time had altered significantly in less than a decade.
“Too early is something like three years or 60,000km,” he said. “Seven years ago that was the optimum timing, but the market has moved on considerably.
“It’s time everybody looked at ways of saving on their light fleet cost, and one of the easiest is hanging on to your vehicle for a lot longer.”
Mr Andrews said holding on to light vehicles for five years or 120,000km, whichever came first, was now preferable. For high utilisation vehicles owners can extend even further to 160,000km with little financial risk.
“Let’s just say we’ve got a really small council and they’ve got 40 light vehicles,” he said. “$500 (loss) per car per year, it’s another $20,000 per year, and $20,000 per year goes a long way in a small council.”
Mr Andrews said there needed to be a different mindset regarding the use of vehicles as a way to attract and retain staff.
“Just about everywhere you go in Europe and America, very few people get company owned motorcars these days,” he said. “Instead of giving people a company car, the employer can say ‘here is your car allowance, and you can provide your own vehicle for your business and private use’. This opens the door for other options including a novated lease.”
