The recovering economy has brought a bit of bad news to the SMB owner looking to restock their fleet with quality used vehicles. The problem? The dealer inventory has dried up, which presents a problem for smaller fleet managers who rely on dealers’ used van and truck inventories to update their fleets — updates which were often postponed during the recession.
Chris Brown explains the drought of quality used vehicles in a recent post for BusinessFleet. Several factors contribute to the vehicle shortage. Several companies went out of business during the recession, and those that survived are buying up all the inventory. Additionally, the tsunami and earthquake in Japan is still creating supply bottlenecks. Additionally, manufacturers are trying to trim risk and aren’t making a surplus of vehicles as they did in the past, according to Brown. Add to the already tenuous situation smaller businesses, such as HVAC and other service contractors, who are once again looking to update their aging fleets after riding out the recession. According to Brown, “The companies that were retiring work vehicles at five or six years and 120,000 to 150,000 miles are now turning them at seven or eight years and 200,000 miles.”
Bottom line: There are more people competing for a dwindled supply of service vehicles. However, pickup trucks seem to be the least affected genre as new home construction continues to stutter, making home contractors reluctant to purchase new trucks.
The SMB fleet manager, it seems, will have to get lucky or nurse the current fleet until supply catches up with demand. Alternatively, BusinessFleet‘s Mike Antioch recommends “short-cycling,” or decreasing the amount of time fleet managers hold onto their vehicles. By reducing the lifespan of each vehicle, owners can reduce maintenance costs and increase resale value. Often, the newer vehicles with fewer miles may actually fall under warranty, saving managers a bundle of maintenance costs.