Q. Are you seeing customers returning their fleet due to cost cutting measures ?
Mike: It’s true that some fleets are driving less, given the restrictions on movement. And we have had customers extending current replacement terms and delaying new vehicle orders in response. Some fleets will even be looking to reduce fleet size, but we also have other sectors – especially those running commercial fleets – that have never been busier. As a result, we are seeing greater demand for our medium-term leasing solution, LeasePlan Flexible, and our short-term rental service.
Q. How much less are fleets driving because of COVID-19?
Jess: Although it felt like everything stopped immediately, this really wasn’t the case for a large percentage of our customers. Many of them are public sector employers, including the NHS.
At the time of lockdown, almost 50% of our customers were in the ‘essential business’ category, so they have continued to operate their fleets throughout the pandemic.
That said, perk drivers and those in more traditional sales-type roles have obviously seen a significant drop in mileage since lockdown began on 23 March. In an overseas example, LeasePlan US saw a 48.3% decrease in mileage from clients in the finance, insurance and real estate sectors.
Q. What should fleets do about vehicles that haven’t been used during lockdown?
Jess: It’s worth noting that the AA has reported a 40% increase in callouts during the first week of lockdown easing, so the most important step for fleets is to check that ‘idle’ vehicles are roadworthy. They also need to make sure that drivers who are not used to driving long distances are familiar with their vehicles.
Where employees are still on furlough, our customers are opting for longer contract terms, as they expect they will need to keep the vehicles longer. This is largely because many corporate fleet vehicles are not doing as many miles right now as they usually would, so they are not reaching the anticipated replacement mileage as quickly.
For more help and guidance on keeping idle vehicles in good condition, please read our article.
Q. What effect is the pandemic having on replacement / order cycles?
Mike: Manufacturer production shutdowns have meant that delays in fleet replacement orders have been seen right across the world, with knock-on issues in the parts supply chain.
We are working closely with OEMs to ensure a steady return to ‘normal’. Our Manufacturer Team are providing daily updates to our customer service and account management teams, so our customers know if they can expect any delays due to interruptions in the supply chain.
This could be anything from factory shutdowns to delays with our convertors or slower than usual delivery times (what used to take two or three days to arrange delivery for can now take two weeks).
Q. What do you think fleets should be doing now?
Mike: As we have heard from LeasePlan Italy, Spain and Germany, it’s all about looking ahead – not back – which means fleet policy and future fleet strategy. Right now, fleets should be updating their policies, making sure they’re including more detailed health and safety guidelines and thinking about the vehicle as a mobile workspace.
We will be holding a webinar on Fleet Strategy as part of this series. If you’d like to make sure you get all the latest insights, please register for our webinar.
Q. Is LeasePlan offering any special help to customers under these circumstances?
Mike: We’re working hard to ensure we keep our customers informed about the latest developments. It’s the reason we’re running this webinar series, after all, and we have a crisis communication team who are responsible for proactively seeking out key information for fleets.
In addition, our insights website is a useful resource for fleet managers and we have a regularly updated FAQ page. Our website also includes links to financial support and assistance. We understand that this is a challenging time for everyone, and we’re working hard to provide the support our customers need.
Q. A number of dealer groups have indicated they will be adding a sanitisation charge for vehicles that have any work completed. Is there a cost implication for fleets and will these costs be passed on by the lease companies?
Jess: Keeping our customers and our team safe is our top priority. This also extends to the people working in our network of garages and fitters, who help keep your vehicles safe and on the road.
Garages are reducing the risk of infection for customers and their teams by following government guidance on cleaning a vehicle’s main contact areas before and after a service or repair, as well as regularly cleaning waiting areas. This important work takes time, which unfortunately means many garages will charge up to £20 per service for this unexpected operational cost.
As part of our commitment to keeping you safe and well during this COVID-19 pandemic, customers using our Service Booking Line for a service, tyre change or other maintenance appointment will not pay these cleaning charges (though there is an exception for some main dealer warranty work).
Q. How we can increase the mileage on the contract?
We understand that mileage requirements may change during the course of the contract, we are happy to offer a flexible approach to this and are able to offer both mileage increases and decreases. To get a revised mileage quotation or to enquire about extending your current contract please contact your LeasePlan Account Manager.
Missed our first ‘Lifting the Lockdown’ webinar? You can still watch the video on-demand here