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Minimizing Your Fleet Costs

Minimizing Your Fleet Costs. Dave Arney VRCG, Inc. 2011 Car Rental Show Las Vegas . Dave Arney VRCG, Inc. 21 Years Experience 13 Years with Enterprise VRCG is 10 years old – Co-owner for 8 Consulting , Remarketing, Fleet Planning We: Buy cars Sell cars Move cars. Greg Lubrani.

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Minimizing Your Fleet Costs

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  1. Minimizing Your Fleet Costs Dave Arney VRCG, Inc. 2011 Car Rental Show Las Vegas

  2. Dave ArneyVRCG, Inc. • 21 Years Experience • 13 Years with Enterprise • VRCG is 10 years old – Co-owner for 8 • Consulting , Remarketing, Fleet Planning • We: • Buy cars • Sell cars • Move cars

  3. Greg Lubrani • 25 Years Automotive Experience • Enterprise RAC – Corporate Remarketing Manager • Acquisitions • Remarketing • Retail • Auction Broadcasting Company • Manheim Auto Auctions • OPENLANE – Business Line Director • Strategic RAC Programs

  4. Your Organization – You wear a lot of hats • New Car Buyer • L&T Tax & Title Department • Banker • Insurance Broker • Body Shop Manager • HR Department • Used Car Department • ….And try to have a social life too…..

  5. Typical Time Spent

  6. …This is minimum of what a fleet planner should spend their time on!

  7. Calculate Your Holding Cost $20,000 Capitalized Cost of Unit - $16,500 Operated it for 14 Months $ 3,500 Actual Total Depreciation $3500/14 months = $250 actual month dep. Or 1.25% per month Then add Interest Costs You can also drill this down to “depreciation per day” if you’d like, to compare to your daily dollar average or average daily rate

  8. Where Does Your Company Stand? Fleet Cost as a Percentage of Gross Revenue • 25-30% - Very Good • 30-35% - Average • 35-40% - Below Average • 40-50% - Poor

  9. Metrics – where have you been, and where are you going? • Wash out Report • Trend on Cap Cost • Average Time in Fleet • Average Mileage in Fleet • Date of last Rental to Funds Received • However you measure, you need to have some snapshot you rely on!

  10. Factors of a Healthy Fleet “The Big 3” • Buying • Remarketing • Timing

  11. “The Buy” • Who • When • What • Where • New or Used? • Holding Cost Projection • Risk vs. Program • Associated Expenses – time, trucking, lot damage, possibility of theft, etc. – there are a dozen of them

  12. “The Sell”Pricing and other Factors • More Information than ever! • Industry Information/Days Supply/Incentives • Take advantage of Macro Market conditions • Take advantage of the hot car! Or lose the loser! • Future Cost Projection • Tipping Points – Gas Price, Weather, Warranty, Miles, etc. • Upstream plan • Disposition – Cash Management - How Fast?

  13. Diversify Your Remarketing Channels • Auctions - Help to determine price, but you only have 1 Day • On Line Auction – 24/7 • Local Wholesalers • National Remarketing • Local Dealer – Limited Appetite • Local non-franchise – Risk • Use Every Means at Your Disposal!

  14. Timing- It’s Everything • Fleet Planning – It’s an on going process. • Ins and outs • Cost Going Forward • How much time do spend on it? • How much time should you spend?

  15. Order In Fleet Tool

  16. Order In Fleet Tool

  17. Actually Make Decisions!! • Fleet planning is not for those willing to go with the flow, or reactive • You have to have the basics down, and they can be “pretty basic” stuff, or as complicated as you’d like, but you must have your finger on the pulse of this part of your business • When you see a trend developing, based on your skills and what you know, you must be willing and able to move on it

  18. If you do it right, here’s where your total expenses will go to…

  19. Contact • Dave Arney • Royal Oak, MI • darney@vrcg.com • 248-298-0271 • Available for warm climate consulting and travel from November thru April! • www.vrcg.com

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