Plan Ahead, Maximize Returns When Cycling Fleet Vehicles

Everyone is talking cycling these days. When is the right time to cycle vehicles? When will I achieve optimal return on my investment? The industry is just coming off an unprecedented period when used cars actually appreciated. But just like gravity, supply and demand is really tough to avoid. Used vehicles were increasing in value because there were so few in the market. As fleets begin to cycle and the supply of used vehicles increases, we’ll see a more normalized pattern in remarketing.

When is the right time to cycle?

“Here’s the thing about cycling vehicles: There are a lot of milestones vehicles must pass on their way to driver pick up and used unit drop off,” said Gus Xamplas, VP of Vehicle Remarketing. “Even if order placement, build out, upfit, and transportation all go like clockwork, it’s likely to be about a 12 week process – or more in some cases. That’s an impossibly long time for any market to sustain a price.”

Knowing that, the best advice is to be ready, create a plan, and stick with it – barring any extraordinary circumstances, of course.

So what do we recommend?

Adhering to an optimized, disciplined cycling schedule keeps costs in line and avoids disrupting fleet operations. “We recommend cycling when it makes sense from the maintenance/replacement cost perspective,” Gus went on to say. “We can help predict that point in a vehicle’s life when maintenance costs are going to drive the cost per mile up. Our Strategic Consultants are experts at helping find that spot where you begin to see diminished returns.”

Figure 1: Overall Life to Date Maintenance Example

According to Amy Blaine, Director of Strategic Consulting and Sustainability, “It’s important to have a cycling policy in place so that you know the optimal mileage to cycle your vehicles to minimize unexpected maintenance spend [See Figure 1]. Then, we work with customers to proactively create a replacement plan using a Replacement Forecast in FleetWeb® to ensure that vehicles are removed from service according to the policy.”

So what’s the bottom line?

Volume in the used vehicle markets is expected to increase for the next several years. You’ll remember that 2009 was a really slow period for automobile sales. However, since then, new vehicle sales have been increasing every year. Used vehicle sales follow in lock step. So it is expected that used volumes will increase. But the volumes aren’t spiking up; they’re increasing gradually. We’re still way below the pre-recession sales volume levels.

On balance, used vehicles will now begin to follow a normal depreciation curve similar to what was seen in the pre-recessionary time period. If depreciation is matched to actual use, vehicles are kept in reasonable condition and properly maintained, a disciplined cycling approach will produce the best result.

If you would like to discuss your remarketing efforts, Gus can be reached at 847-412-4995. Amy can be reached at 847-412-5384.


amy-blaine-large

In related news, we’re very proud to announce that Amy Blaine, Donlen’s Director of Strategic Consulting and Sustainability,made this year’s list of Sustainability All-Stars, presented at the 2012 Green Fleet Conference this week.

According to Green Fleet Magazine, “these fleet professionals have reduced greenhouse gas emissions, created green fleet and sustainability policies, and have dedicated their time and energy to ensuring the path to sustainability is clear.”

Way to go, Amy!


Hertz Value Lease™ Deal of the Week

Watch this space each week as we feature one vehicle* from the vast pool of quality pre-owned vehicles available for lease. Easily search thousands of available vehicles from within FleetWeb [See Figure 2, below] and realize benefits of this innovative leasing program:

  • Reduce your leasing costs, with all the benefits of your current Donlen lease program
  • Narrow the gap between book value and market value
  • Lower your risk with pre-owned vehicles still under warranty
  • Have a great alternative solution for new hires

2012 Chevy Malibu LT

  • Estimated Mileage:  27,086
  • Exterior Color: White
  • Hertz Value Lease Base Price: $14,381

*Vehicle was available at the time of posting to FridayFleet. The same vehicle may not be available after this date. Photo of vehicle is for illustrative purposes only.

Contact your Donlen Account Manager to learn more about Hertz Value Lease vehicles that may be right for your application.

Figure 2: Hertz Value Lease in FleetWeb


FleetWeb® Tips

Use the CARE dashboard gauge to see a snapshot of your interactions with your Donlen customer service rep, located on the FleetWeb dashboard.

Don’t have the CARE gauge on your dashboard?

  • Click “Show Menu” at the top of the screen
  • Click “My FleetWeb” menu item
  • Set it to display by checking the box next to “CARE” in your Donlen Dashboard Preferences

Click on the gauge for full details and real-time status of all open, resolved, and pending CARE requests.


Driver’s Corner

Don’t be “that driver.” You know the one: impatient, aggressive, and dangerous. Road rage can be defined as anything from aggressive driving maneuvers to physical confrontations between drivers. We all spend a lot of time in our cars, and yes, that can be very stressful at times. Increased traffic, roadwork, time commitments, and jam-packed schedules can all contribute. Here are a few ways to keep calm out on the road:

  • Don’t show a reaction to aggressive drivers that you may encounter; it can escalate into a dangerous situation
  • Keep control over your own anger; better to remain calm to ensure your own safety and those around you
  • Don’t blow your horn at a driver who is behaving aggressively

Bottom line to avoid road rage? Practice good driving behavior, remain calm behind the wheel, and be courteous to other drivers.


And Finally…

And finally, if you’re like many of us around here, you fondly remember packing into the car when you were a kid and heading to the drive-in movie. Well, a new custom SMART car goes one better. It has a movie projector built right into the front of the car. Connect your iPhone into the car, park in front of a blank wall, and voila! Instant drive-in movie theater. Popcorn anyone?

Have a nice weekend. Safe travels.

Originally appeared in FridayFleet on October 5, 2012


About Donlen
A wholly owned subsidiary of The Hertz Corporation (NYSE:HTZ), Donlen (www.donlen.com), with headquarters in Northbrook, IL, is the fleet industry’s most comprehensive and integrated provider of financing and asset management solutions. Since 1965, Donlen has offered its clients highly personalized and responsive customer service, and their workplace excellence has been recognized as one of Crain’s Chicago Business “List of 20 Best Places to Work in Chicago” each year from 2009-2011, a Leader on “The Global Outsourcing 100®” list by the International Association of Outsourcing Professionals (IAOP) for six of the last seven years, and a National Association for Business Resources “101 Best and Brightest Places to Work For in Chicago” each year from 2007-2012. Donlen’s innovation has been awarded with the Computerworld “2012 Honors Laureate for Economic Opportunity,” named to “2012 InformationWeek 500” for innovative technology; the Stevie® “2012 Gold Award for Business Intelligence Solution,” the Silver Award for “2012 Front Line Customer Service Team of the Year,” and the “2011 Corporate Environmental Responsibility Program of the Year.”