How dynamic procurement helps reduce your fleet costs

How much would you like to pay for the lease rental on your new company car?

We suspect you would like to pay the best rate on the market. Well, we all would.

But how do you know that you are paying the most cost effective rental on the market? Answer, you probably don’t.

You could be paying the best rate + 10%; perhaps, the best rate + 30%; even, occasionally, it can be as high as the best rate +45%.

It all adds up to a significant on-cost to your business and the overall operational efficiency of your fleet, particularly if your fleet is a ‘sole supply’ – that’s one leasing company providing all your leasing and fleet management facilities.

There are several reasons why this might seem a good idea – one point of contact, simple invoicing structure and so on – but actually this costs your business more money.

First there is ‘rate creep’. As the relationship lengthens between your lease provider and your fleet there is no counterbalance against additional profiteering on the rental.

Second, different funders have different approaches to risk on certain cars, leading to wildly different rentals for the same car.

Third you are squeezing your credit line by using one source of funding for your fleet.

Which is where dynamic procurement plays such a key role in reducing fleet costs.

Dynamic procurement ensures that every vehicle on your fleet is leased at the very lowest rental on the market.

CBVC Vehicle Management can achieve this because it puts every lease out to tender to a cross section of funders on the market, and then selects the lowest rental on the day. It ensures you always secure your car lease at the lowest possible price available.

How dynamic procurement can lower the rental you pay

Pricing is based on 3 years/10,000 miles per annum inclusive of maintenance exclusive of VAT. The most expensive rental is shown in red; the least expensive in green.

Here is a typical example of how dynamic pricing, using a panel of funders, can save on rentals.

For example, the MG ZS is most expensive with Funder 4 at £517.06 per month, but cheapest with Funder 3 at £344 per month, a saving of £173. Over the contract that’s a huge £6228 saving using the dynamic procurement process with CBVC Vehicle Management.

It also prevents the ‘price creep’ of using sole funder supply for company cars – reflected in the right hand column of the tape above.

Dynamic procurement can save a fleet thousands of pounds and the bigger the fleet the greater the savings, of course.  By ensuring you always get the best price through dynamic procurement drives out your operational costs which drop to the bottom line. It also enables you to spread your credit line through a number of funders.

Mike Manners, Managing Director, CBVC Vehicle Management

Saving money is one aspect of dynamic procurement, but it does mean your drivers will be in cars supplied by a variety of different funders. 

So what happens when driver A needs a new windscreen, driver B a tyre replaced and driver C needs a service?

They could call you. But that would leave you swamped with calls simply providing phone numbers right, left and centre. 

To ensure the acquisition efficiency of dynamic procurement is carried through into fleet efficiency for your business we have the CBVC Vehicle Management Driver App.

The Driver App, which works on all smartphones, is personal to each driver and shows their vehicle, the vehicle funder, and all the numbers relevant to that vehicle and funder, whether that’s glass replacement or MOT centre. All relevant driver information is centralised in one place.

The provision of dynamic procurement and fleet management through our Driver App ensures your fleet is not only financially efficient but it’s operationally efficient too. It’s a compelling combination that eliminates excess costs and boosts the bottom line.

Mike Manners, Managing Director, CBVC Vehicle Management

Would dynamic procurement fit your fleet?

Contact CBVC Vehicle Management on 01283 351200.