Reducing Your Fleet Costs (1)

It is important for anyone responsible for running a fleet to be aware of all associated costs, of which there are many. Below we give you guidance on what points to consider.

Funding

• Are you funding your vehicles in the most effective way? You should compare funding over the contract period on a net present value (NPV) basis

• Are you running vehicles over an optimum period of months given vehicle type, usage and anticipated mileage?

• How important is predictability of costs to your business (used vehicle prices and running costs move with market forces, contract hire passes the risk to the leasing company)

Vehicle Choice

• What is the total cost of the chosen vehicle? Consider resale values, maintenance, insurance, fuel and NI costs when selecting vehicles

• Is it cheaper to run diesel or petrol models for your fleet? Purchase price will vary as will maintenance costs, mpg performance and pump prices for fuel

• What discounts are available? Large leasing companies reflect volume-related discounts from

manufacturers in pricing to their customers. Depending on fleet size you may be able to

negotiate discount with manufacturers or dealers, particularly if you restrict vehicle choice to a small number of makes and models rather than an open “user chooser” policy

• Consider carefully which optional extras your policy will allow drivers to add to their vehicle. Some help vehicles retain value at resale (e.g. metallic paint, alloy wheels, leather seats, sat nav) others may detract buyers (unusual colours, body kits, sun roofs, manual transmission on prestige makes). LCV’s benefit from ply lining, full bulkheads, manufacturer white colour and correct wheel base to weight ratio

• Many fleets choose benchmark vehicles to align vehicle choice with driver entitlements and ensure a competitive offer compared to other similar employers. Choose models that reflect your fleet policy objectives

End of Life

• Damage to vehicles costs you money at disposal either through reduced sale values or recharges if leased. Ensure all damage is reported – SMART or bodyshop repair may save further damage and prove a more cost-effective solution. Some companies oblige drivers to contribute towards the cost of repairs they have caused

• Keep track of vehicle mileages. Vehicles with higher than anticipated mileage will achieve less at sale and if contract hired attract excess mileage costs

• Re-contracting leased vehicles to adjust expected end mileage is a good way of spreading these costs over the course of the remaining contract. If mileage is likely to be lower than anticipated you could pay less each month till the end of the contract

• If a driver leaves and you need to return a leased vehicle earlier than expected, avoid early termination charges by relocating vehicles to new drivers for the remainder of the lease or offering up to existing drivers due a replacement

Maintenance

• Maintenance can be paid for on an actual cost basis or more predictably on a budgeted basis e.g. as part of a contract hire monthly payment

• Buying maintenance through leasing companies can save you money through:

– Taking advantage of combined buying power

– Controlled quality and cost of work through a managed network with pre-authorisation by trained

technicians

– Consolidating invoices for all work carried out

– Ensuring warranty work is not charged

– Identifying problem vehicles and making representation to the manufacturer

• Make clear to drivers their responsibilities, e.g. for tyre pressures and tread; oil, fuel, water, antifreeze levels; wiper blades; vehicle cleanliness; lighting checks

• Proactive maintenance can prevent additional costs, improve safety and reduce fuel consumption

• Identify “rogue” drivers with above average maintenance, tyre, damage, accident and fuel costs.

Discuss their driving performance with them, consider driver training or recharging of some items.

If this is a common problem consider linking level of vehicle entitlement to driving record

Vehicle Donation: Just One Way of Making Your Contribution

Over the past few months, charitable institutions have tried their best to encourage the public to make larger donations. The economic downturn has hit charities hard, causing a drop in their funding, and they need . more money than ever before to continue doing their good work. The main focus of charities recently has been vehicle donation. Major charitable institutions like The American Red Cross and the Goodwill Industries have found out that their income has suddenly increased because of more individuals contributing big donations like vehicle donation instead of smaller cash donations With this in mind, these charities are now trying to increase awareness of the benefits that come with an auto donation.  
Today, charitable institutions are looking at the bigger picture. They are sending out the message that you don’t have to just donate a car to make a difference. Charitable institutions accept all sorts of large donations. They are very capable of flipping those large items, getting the funds they need. Like others, I might think twice before donating my car, but there are numerous other items, slightly less valuable, in and around my home, which I would be hapy to donate to a charity. Many people feel the same and charities would like to capitalize on this.
These charities are mostly looking for motorboats, motors, trailers and other such things as donation. Their reasons for accepting such items as these are numerous. The charities can themselves go about selling the items and sometimes get more value from their sale than you would. There is also an advantage for those making the donation. Donating a boat, trailer or a similar item will entitle you to the same kind of tax exemption that you would recieve by donating a car or truck. The rules governing tax exemption are the same. You must record the details of the donation on your tax form, along with the value of the car.
All in all this is a win-win senario for you as well as the charities. Charitable institutions with the help of your donation will be able to continue their good work and you can enjoy a small tax exemption by getting rid of an item that you did not need in the first place.

Useful Tips for Buying From Vehicle Auctions

Auctions are a rich source of cheap pre-owned vehicles. And these vehicles come from a variety of sources: private owners looking to dispose of their cars by selling them at online auctions; insurance companies attempting to recoup their losses by selling vehicles at salvage auctions; and government auctions selling seized or forfeited vehicles.

Whether you choose to buy from an online vehicle auction or a traditional auction, the basics are the same. However, it is always a good idea to be prepared even before attempting that first bid.
Here a few tips that might prove to be useful when buying from vehicle auctions:  
1. Do your homework. Know what you want to buy. You should also have a good idea of what the car is worth. If you are not familiar with cars, bring someone with you who does.
2. Don’t rush. When you arrive at the auction, immediately take a look around. Get a catalogue, walk around, and examine the vehicles. Take time to choose the vehicle that interests you, and if possible, select a couple of back-ups should you unfortunately lose the first bid.

3. Check the car. Remember to check the car’s overall exterior condition (paintwork, trim, tires) as well as its interior condition (seats and carpets) prior to buying. Most auction vehicles are sold “as is”, so take every opportunity to examine them thoroughly before fishing out your wallet.
4. Set a budget. It is important to set a limit on what you are prepared to pay. Also remember that for older cars, you should set aside some extra funds for minor repairs.
5. Be flexible. In other words, don’t be a compulsive buyer. Don’t overlook some obvious faults just because you like a vehicle’s color or you like a particular model. Larger auctions have more than 1,000 vehicles available so if you miss your first choice you have a lot more to choose from. 
Purchasing vehicles from auctions is definitely a bargain especially if you know what you are looking for. But it is also a huge risk and there are a lot of scammers out there who are looking for a quick buck. It is important to take all the necessary precautions to minimize the risk of losing your money.

Catena Enters 2nd Mercedes Benz Dealership

Catena, President of Edison- based Ray Catena Motors, initiated the opening of his second Mercedes-Benz dealership. Ray Catena Mercedes-Benz has been a family business since 1959. It began with a simple used car lot and has evolved into an excellent sales leader within the Mercedes-Benz USA’s (MBUSA) franchise network.

Catena proudly said that their main aim when they started the franchise business was to do one thing completely. He further said that the opening of their new facility in Union will grant them the opportunity to exalt even higher the experience that their customers already have with them.

Opened to the public for them to see the evolved franchise business, the eloquent event was held from 5 o’clock up to 9 o’clock in the afternoon. It included several odysseys to the refined showroom and service facility that showcased the latest models in the Mercedes-Benz product line-up. It was really a marvelous event that marked another milestone to Mercedes.

During the classy event, Ray Catena Mercedes-Benz of Union gave a toast to a successful future with their clients and guests, while raising essential funds for “Bright Steps Forward”.

The General Manager of Mercedes-Benz USA’s Northeast Region, Joseph Kurp, said Ray Catena has long been a standing member of the Mercedes-Benz dealer arena. He further said that Catena plays an important role in the success of Mercedes-Benz in the US as a brand in a strictly competitive Tri-State market.

Kurp also said that Ray Catena Mercedes-Benz of Union is giving the customers a high- level of service through the establishment of a new and conveniently located Mercedes-Benz dealership in Union, New Jersey.

About “Bright Steps Forward”

“Bright Steps Forward” is an organization that facilitates unswerving pediatric therapy for those children who cannot afford medical services. During the opening of Ray Catena Mercedes-Benz of Union, guests who made contributions of $100 or more to “Bright Steps Forward” will be entered into a draw for a 27-month lease of a new Mercedes-Benz R350. The said contains a top of the line Mercedes performance chip. The winner was drawn live in the event. A silent auction was also held to financially and emotionally support this life-changing charity.

About Mercedes-Benz USA (MBUSA)

With its headquarter in Montvale, New Jersey, Mercedes-Benz USA (MBUSA) is the group that is responsible for the sales, marketing and service of all Mercedes-Benz and Maybach products in the United States. MBUSA reached the all-time sales record of 248,080 new vehicles in 2006. This has set the highest sales volume ever in its history and has achieved 13 consecutive years of sales growth. Its northeastern regional office which is based in Parsippany, NJ is the on responsible for advertising, sales and marketing initiatives for the 94 dealers of Mercedes that are located in the Northeast of the country.

Though a German car, Mercedes-Benz continues its struggle in topping the US auto mobile market. And this new Ray Catena Mercedes-Benz of Union is a proof of such struggle.

0G0erman automaker Daimler-Benz and the American auto manufacturer Chrysler Group merged in 1998 for a $36 billion consideration. Now, Daimler is selling its American luxury brand for just $7.4 billion. What went awfully wrong?

Automotive records reflect that most of the failures in the industry involved individual vehicles. But at present, a failure of more intense magnitude because it is one defined by a company not just car, has shocked the industry. The news came like a bomb especially for the workers of the ailing American automaker. Even the Stillen cold air intake could not circumvent the heat of the matter.

The nine year mergence of the auto giants has come to a halt through the Cerberus Capital Management’s acquisition of an 80.1 percent stake in Chrysler. The New York-based private equity firm promised Monday to restore Chrysler “to the first ranks of the U.S. and global auto industry.”

Daimler will keep 19.9 percent stake and find synergies that still have not occurred. “We obviously overestimated the potential of synergies,” Dieter Zetsche, the chief executive of DaimlerChrysler, said at a news conference Monday at the company’s headquarters in Stuttgart, Germany. “I don’t know if any amount of due diligence could have given us a better estimation in that regard.”

The acquisition of Chrysler marks the first time one of the Detroit Big Three automakers will be in the hands of a private equity firm. As such, the circumstance has drawn a number of interpretation and analysis. There are those who say the merger, which faced significant cultural differences, was doomed from the start.

“You had two companies from different countries with different languages and different styles come together yet there were no synergies. It was simply an exercise in empire-building by Juergen Schrempp,” said Dave Healy, an analyst with Burnham Securities, referring to the then-Daimler-Benz chairman and why the merger failed. “Basically Daimler has now paid Cerberus to take Chrysler off its hands,” Healy added.

Originally, the plan was for Chrysler to use Daimler parts, components and even vehicle architecture to sharply reduce the cost to produce future vehicles. But problems surfaced when Daimler’s Mercedes-Benz luxury division, whose components Chrysler would use, was averse to contribute to Chrysler. Eventually, all Chrysler got were some steering and suspension components, a transmission and a diesel engine and few packages.

In return, Daimler had hoped that Chrysler would radically raise its standing in the North American auto market. But due to tough competition from Asian automakers, Chrysler fell short. Billed as a “merger of equals,” the $36 billion deal turned out to be anything but, analysts said. Shortly, control of the combined company fell to Daimler Chairman Schrempp.

“Eaton panicked,” Lee Iacocca, said. “We were making $1 billion a quarter and had $12 billion in cash, and while he said it was a merger of equals, he sold Chrysler to Daimler-Benz, when we should have bought them.” And Daimler was an all-too-willing, if uninformed, partner, analysts said. The company underrated the competitive forces that would invade the North American car market and take market share from the domestic carmakers.

“Due diligence? Daimler-Benz never did due diligence before it bought Chrysler, never looked into the future to see whether Chrysler could afford to be competitive with the others in the industry,” stressed George Peterson, the president of Global Insight.

Chrysler sales slipped, prompting the German automaker to dispatch Zetsche to Detroit in 2000 to turn Chrysler around. Having returned Chrysler to profitability by the time he went back to head Daimler in 2006, Zetsche said last Monday that the sale “was a difficult task personally.”

With Zetsche at the helm, Chrysler reported a $1.8 billion gain in 2005. But like other Detroit automakers, the company misread the market. With a heavy reliance on trucks and SUVs, skyrocketing fuel prices quickly dampened sales and Chrysler’s profit melted into a $1.47 billion loss last year, culminating in Monday’s announcement.

“When Zetsche left Chrysler to become chairman of DaimlerChrysler, it shouldn’t have been news to him that Chrysler was headed for trouble,” Peterson said. “Selling Chrysler Group now takes him off the hook.”

Most of Cerberus’ investment will not go to Daimler but will be used to bolster Chrysler’s operations. Just over $1 billion has been allocated for its financial-services activities. “Our approach is fundamentally long term. We don’t think about the next quarter. Our capital is patience,” said Cerberus chairman John Snow. “We take a longer view. We’re prepared to make investments that support management plans.”

But analysts said that the pressure will be on the Auburn Hills, Mich.-based automaker to perform. “Cerberus’ history is to make a 20 percent return on its investments annually. They won’t treat Chrysler like a certificate of deposit,” said Dave Cole, the chairman for the Center for Automotive Research. And that may mean spinning off some of Chrysler’s operations. “They could break Chrysler up and spin off some parts, like its Jeep operations or its mini-van operations. I’m not saying they would, but they could,” said Peterson.

Zetsche noted that Cerberus is not committed to any changes in head count other than the 13,000 workers the automaker already said it needs to shed in three years. “He says no head counts, but that’s today. They still need to get $20 an hour out of the wages and benefits of their workers to be competitive,” Healy said.

Cerberus’ control over Chrysler is expected to be completed in the third quarter. Analysts said that the situation could possibly open the door for the return of Wolfgang Bernhard at Chrysler. Though Cerberus said it will retain Tom LaSorda as CEO, the private-equity firm hired Bernhard, who left the job of chief financial officer at Chrysler in 2004, as a consultant on the deal. Bernhard was most recently head of Volkswagen AG.