By John Wolford, CEI associate director of network services and loss recovery
The number of days it takes to repair a vehicle depends on the extent of its damage. What fleets should find unacceptable, however, are needless delays in repairs that wind up costing hundreds of dollars extra or more in rental bills.
They may be small by comparison, but rental costs are a factor in collision repair costs that still matter, and are often bigger than they need to be. In fact, following a few simple systematic practices, some large fleets could save $10,000 a year or more on rental expenses.
Fleets incur rental costs when they have to secure a temporary replacement vehicle in order to keep their driver productive or cargo on the road while an accident-damaged vehicle is being repaired. The average daily rental cost for a sedan is between $40 and $45 a day, for a mid-sized truck between $65 and $95 (depending on its size and equipment), and between $150 and $175 a day for a semi tractor.
Obviously, how much you spend on a rental depends on how long it takes to get your vehicle repaired and one of your drivers back into it. In general, the more extensive the accident damage, the longer it takes to repair it and the greater the rental expenses. What fleets should find unacceptable, however, are needless delays in repairs that wind up costing hundreds of dollars extra or more in rental bills.
Now let’s say your repair is scheduled to take five working days. For a sedan, the rental should cost around $200, for a mid-sized truck $300 to $400, and $600 to $700 for a tractor. Let’s also suppose that the damaged vehicle was still drivable, and your driver dropped it off at the repair shop on Friday. Now add two more rental days for the following Saturday and Sunday, and the rental portion of your repair bill grows by 40%. You’re looking at another $80 or so for a sedan, $140 to $190 for a mid-sized truck and as much as an extra $350 for a tractor.
But let’s say you’re buried by other tasks, or have to get another party inside your organization to agree to the amount of the estimate, and that person is in another time zone, or away on travel, or has other business to attend to. And then suppose it takes another five days to get that person’s go-ahead. By then, that 7-day rental, which could have been just a five-day rental could easily become a 12-day rental. Worse, if the shop that has your vehicle put another customer’s car in the bay where yours was, you might be looking at 15 days of rental expense – triple what it might have been.
In the fleet repair business, these kinds of things can and do happen. Multiply that by scores of times a year for a big fleet with a 20% to 25% accident rate, and you could be talking about tens of thousands of dollars a year in rental expenses that could have been avoided.
So here are some tips to keeping your fleet’s rental costs under control:
1) Whenever possible, instruct drivers to bring drivable vehicles to the repair shop at the beginning of the week instead of at the end.
2) Be sure that drivers pick up their vehicles as soon as repairs are completed.
3) Be mindful of the cost of delays in authorizing repairs, and be sure to let any other parties who must be involved in the decision know that controlling rental costs should be a priority for all of you.
4) Set parameters for your accident management services provider to proceed with repairs without additional approval. This can be accomplished by allowing your provider to issue approval automatically when certain conservative year, mileage, and cost parameters exist.
What I mean by the last tip is this: if your fleet’s rule is to keep a vehicle for three years, when a 1-1/2 year-old vehicle with relatively low mileage is in an accident, decide on an estimate amount that you’re comfortable authorizing without consulting you. That amount could be less than $2,000 or $1,500 or $1,000 – whatever it is, this practice is likely to save you money on the rental component of your collision repair bills.