Sales fleet consisting of 1500 units that had more than 10 open recalls.
Early in 2014, the fleet team began experiencing compounding issues and concerns regarding 1,200 leased SUVs. A combination of common maintenance issues with the model and manufacturer recalls were impacting fleet operating costs and increasing downtime, which was interfering with the company’s productivity. Due to overwhelming driver concern as well as several incidents, the client came to ARI to brainstorm ways to fix this problem and ensure their field personnel felt they could safely accomplish their jobs.
ARI prepared a replacement strategy for the client’s consideration. The issues we addressed in the study included the potential negative equity of the SUVs, proposed timelines for both a vehicle replacement project and the resale of the outgoing vehicles and whether ARI could quantify and/or guarantee the resulting gain or loss on sale of the recalled SUVs.
The overall solution that ARI presented to the client was the innovative ARIBuyDirectTM program. The only one of its kind in the fleet management industry, this custom remarketing opportunity offers a guaranteed final sale price and a shorter sale. It also avoids fees typically associated with auction sales. As a solution for the client’s problem, the ARIBuyDirect option addressed three of the fleet’s major concerns by providing sufficient time for replacement orders to be placed, delivered, and put into service, nearly instantaneous sales on each asset and fixed price guarantees.
ARI support fleet manager addressed a rapidly growing safety concern.
$2M gain from vehicle sales.
Convenience ARI covered any and all costs associated with selling used vehicles.
Projected Savings/ Benefits and Results to Date
The proposal was ultimately accepted, and with ARI’s support the fleet manager was able to quickly address a rapidly growing safety concern, put the field sales reps in brand new safe vehicles, capitalize on a newly negotiated manufacturer incentive, and demonstrate a $2,000,000 gain from the vehicle sales. Through the BuyDirect program, ARI covered any and all costs associated with selling used vehicles such as: the cost of transportation, any applicable de-identification on the vehicles, condition reporting, detailing, and sales expenses.
The vehicles would then have the recall performed to ensure they were safe, and be resold.
Furthermore, by placing their orders through ARI, we were able to seamlessly link the payment and pick up process for the old vehicles with the delivery of the new vehicles.