Taking the Right Steps in Vehicle Acquisition

In the March 2016 issue of Fleet Financials, experts weighed in on what factors a fleet manager should consider when acquiring vehicles. In “Taking the Right Steps in Vehicle Acquisition,” best practices and supply chain strategies were examined.

ARI’s Director of Supply Chain Management Partha Ghosh noted that he noticed an uptick in dealer stock purchases as of late — a trend he cautioned against. “Ordering patterns are shifting slightly more toward stock purchases versus factory orders. While factory orders still dominate ordering patterns, stock purchases seem to be picking up,” he said. “If this is, indeed, a trend, fleet managers should consider certain implications as part of this decision process. While the primary purpose of purchasing an out-of-stock vehicle is the ‘immediate’ availability of the vehicle versus factory ordering that same vehicle, there are some key trade-offs.”

Ghosh said, on average, an out-of-stock vehicle can cost $3,000 more than the factory model — or even more, depending on the model and/or options. He also advised fleets to be flexible about vehicle options and features when purchasing from dealer stock, due to the difficulty of finding an out-of-stock vehicle that exactly matches the needed specs.

“Looking ahead and anticipating vehicle needs, while always challenging, is the optimal route for acquisitions as it enables factory ordering, which leads to acquiring the correctly spec’d vehicles at typically the lowest possible cost,” he said.

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