End-to-End Fleet Management

With this leasing method, the lessee guarantees the residual value and also shares in any depreciation. The fair market value at the end of the term is estimated at the inception; at the conclusion of the lease, the actual value is determined by either appraisal or sale. If the vehicle is worth less than originally estimated, the lessee is liable for the deficiency; if it is worth more, the excess belongs to the lessee.

This lease method allows the lessee to “walk away” at the end of the term with no liability for increases or decreases in the expected residual value. The lessee will still be liable for damage beyond ordinary wear and tear.

This is often the largest expense of owning a vehicle during the first several years of its life cycle; it includes the purchase price, plus any acquisition charges, minus the resale value, net any selling expenses.

It is the projected value of a vehicle at the end of its lease or life cycle, based on months on lease and mileage expected.

It is a business plan that identifies the point at which a vehicle’s operating costs exceed the value it is producing for a company, prompting the start of the remarketing process.

In the fleet industry, original equipment manufacturer (OEM) refers primarily to automotive manufacturers, such as the U.S. “Big Three” (Fiat Chrysler, Ford, and General Motors), also BMW, Daimler, Honda, Nissan, Toyota, Volkswagen, and more.

It is a company that designs, manufactures and installs aftermarket equipment on vehicles for specialized work functions. Popular applications include oil and energy, telecom, utility, and railroad industries.

It refers to equipment and accessories that are added to vehicles once they leave the OEM. This is how fleets can specialize vehicles for the tasks to be done.

This occurs near the end of a model year, when a manufacturer’s order bank quantity equals the remaining scheduled production capability. Managers must keep this in mind for their fleets when planning their orders.

This is a vehicle delivered with all upfitting and licensing in place to go into service.

Ship-thru is the transportation process in which the OEM ships a vehicle to the upfitter, then the upfitter returns it to the OEM transportation system to be delivered to the buyer. Ship-to is when the OEM ships a vehicle to the upfitter, then either the upfitter, a drive away company, or a local dealer delivers it to the buyer. Also referred to as a drop-ship, this method is ideal for large specialty equipment such as cranes, bucket trucks, and other equipment for medium and heavy-duty units.

To counter fuel fraud, fleet management companies offer velocity control features that limit a driver’s number of daily transactions and spend.

This is the proactive scheduling of oil changes, tire rotations, and other routine maintenance for fleets based on OEM recommendations with intentions to prevent engine and powertrain failures, and reduce downtime and repair expenses.

It is the disruption to fleet operations that cause loss of productivity and/or revenue, and potentially impact morale. Examples include late delivery, maintenance, accidents, and failure to meet regulatory compliance.

Hard costs are expenses associated with downtime that are found on your expense report. In the case where vehicles break down, the hard costs you would accrue include towing and repairs, plus a rental (if needed). Soft costs are expenses associated with downtime that are not found on your expense report, such as lost productivity and missed revenue.

It is the process of collecting money from the responsible party in an accident.

This outlines your company’s standards and expectations for employees while operating fleet vehicles, including repercussions for non-compliance.

A driver’s actions behind the wheel of your fleet vehicle have an impact on your operating spend, liability, and public perception. Driving behaviors such as speeding, harsh braking, rapid acceleration, and cornering put added wear and tear, and increase the potential for accidents.

This includes all information about vehicles and drivers that an in-house fleet manager or fleet management company can track, monitor, analyze and report. Standard sources of fleet data include OEMs, upfitters, and maintenance and fuel vendors.

Predictive analytics is advanced reporting technology that analyzes data to identify trends. This is a good use case for managers looking to enhance their fleets.

It is the ability to compile data from multiple resources into one computer system.

This is data that allows you to make an educated decision or identify solutions to problems.

These are electronic devices that fleets install on vehicles to collect and transmit supplemental fleet data about where and how the vehicles are being operated. Uses include movement tracking, engine performance, and driver behavior. The trend is growing for OEMs to install built-in telematics devices in vehicles.