by Steve Bender, AFLA President
November 20, 2022
As your new AFLA President, I feel compelled to share a small peek at the source of some of my wisdom. As I write this, I’m staring into a secret crystal ball given to me a long time ago by an extremely powerful wizard. For the sake of protecting his true identity, I shall only refer to him as Nicholas.
Hang on, I’ve got this thing somewhere.
There it is. Let me bring this thing in to focus.
A few magic words, and …. Good… it’s coming clear to me now.
Perfect!
I will now share with you what I am seeing in my magic crystal ball.
It’s a small town with light snow falling over quaint little houses on a tree lined street. Beautiful fluffy white evergreens sporadically dot the landscape, and as I focus more intently on the front yard of the most prominent house …
…wait – I can almost see it. It looks like a cheery little snowman, and he’s waving at me.
Darn – I don’t get it.
Lately, every time I look at my crystal ball, I’m seeing the same thing (sounds like the fleet space, doesn’t it?!) It’s making me start to question its authenticity.
But then, I take a second look …
… and between the snowman and the house there is a small gathering of people all holding hands. It looks like they may be singing – or cheering – like they’re all working together to make their magical little world a better place.
Suddenly, I realize the real power of having a crystal ball is not using it to predict the future (that would be ludicrous), but rather to remind me that – like the folks in my crystal ball -when good people work together, it can make our future a far better place.
So in the spirit of the upcoming season, and with a wee nudge to help move fleet FORWARD TOGETHER – I’d like to share a few important thoughts on what I see ahead for our own special little world – the amazing fleet industry we all know and love.
As I write this, it’s obvious that while the pandemic is behind us, its aftermath has left a deep and wide swath of challenges in its wake.
Stress and accident rates are high.
Total cost of ownership is all but a thing of the past.
And perhaps one of the most challenging dilemmas we’ve ever faced – mass vehicle shortages – is having a profound and lasting effect on just about every corner of our industry.
For the OEM’s, a lack of vehicles makes it hard to generate revenue and to instill confidence in customers, many of whom are wondering when – or even if – there’ll be a return to the days when vehicles were readily available.
And for fleets, the lack of vehicles makes it not only a challenge to run an efficient operation, it also makes it hard to run an operation of any kind, period.
For service providers like Fleet Street, the lack of new vehicles means less older vehicles are coming out of service, leaving remarketers like us searching for inventory.
The same holds true for upfitters, who can’t find the vehicles or chassis they need to install their products and solutions (or plan for the upfitting process.) Or transporters, who have fewer new vehicles to deliver into service – or old ones to take out. The vehicle shortage phenomenon has caused a cascading effect that reaches into every corner of our industry. Until it works itself out, there’s little any of us can do to return to the days of old, or even arrive at our next normal.
So – while the idea of loaning out my crystal ball is appealing, what I really want to give my fellow fleet professionals – and especially my customers – is practical advice based on over 30 years as a remarketing leader.
One of the first things I suggest they signal the alarm on is the falling prices of used vehicles. It’s causing a situation that will leave the wrong kind of assets on the street as we head in to 2023. This will drive the prices of new vehicles higher, potentially causing a huge disconnect between the amount of money companies have budgeted for them, and the reality of what they cost. By sounding the alarm on this situation now, fleet managers will help their companies avoid major financial hurdles while better positioning themselves to prosper as the economy recovers (and believe me it will.)
We also want to help fleet managers discover strategies that help make up for up for the loss of incentives on vehicle purchases and the loss of rebates from vehicle remarketing. One way to minimize the negative effect of these losses is to remarket vehicles direct to consumers through Fleet Street’s Carvantedge.com, our online retail site. So, while there’s nothing we can do about the price of used vehicles, we can help you skip two steps in the process while keeping more money.
Or by leveraging our expertise to sell vehicles at the right time of year – and in the right geographic locations – to maximize return on investment. We can even help you establish an employee vehicle buy-back program that helps your company reduce liability while creating a no-cost benefit employees will love.
Obviously, these are tough times for fleet, but like the little gathering of people in my magic crystal ball, we should all stay positive. We’ve been through challenging times before and we’ve always come out on top. And as the President of AFLA, if you ask me, we’re poised to do it again!
Here’s hoping everyone has a safe, happy and healthy holiday season with friends and family, and new year filled with joy, promise and more vehicles than any of us can handle!
About the author
Steve Bender is the President of Fleet Street Remarketing and the new president of the Automotive Fleet Leasing Association (AFLA.) He would love to hear your thoughts and can be reached at [email protected]
