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Vehicle Purchasing
Effective vehicle purchasing requires an in-depth knowledge of the motor industry, the manufacturers and the dealers.

Our local industry is extremely volatile and is heavily influenced by both local and economic factors. Government can also impact heavily on short-term factors.

Price increases are likely to always be a regular feature of our vehicle market. The manufacturers are constantly developing and launching new models. This normally results in "run out" programmes with vehicles being offered special prices.

Projected new vehicle launches could also mean that you should delay purchasing to take advantage of newer technology, vehicle specifications and fuel economy.

Unless proper communication channels are developed at top level with the manufacturers, this type of information will not be available. The company must be seen as a total fleet in the eyes of the manufacturers in order to obtain this sometimes-confidential information.

Timing is another major factor because of the model year concept. In January of each year all vehicles become one year old irrespective of when purchased in the previous year. It generally makes sense to purchase early in the year in order to amortise the high first year depreciation costs more effectively.

Price increases of about 4% are usually applied at the beginning of each quarter. Currently (2004) we are enjoying a comparative price freeze. However, watch prices carefully because they will creep in every now and then during the year.

The factories also close down over December and January. This usually creates stock shortages in the early part of each year.

Guidelines should be developed for vehicle purchases based on these factors:-

1. If you operate a very big fleet of vehicles it is advisable to do the following three things

• Hold regular meetings with the senior fleet management of each manufacturer.
• Request regular model / industry updates.
• Request advance pricing information.

2. Project annual purchase requirements and develop an advance ordering system.

3. Up to 75% of all purchases should be delivered in the first six months of each year.

4. Price protection should be negotiated for all advance ordering where the order size warrants this action.

5. Ensure that you receive your normal fleet discounts.

6. Evaluate your dealer choices and ensure you receive the required fleet services in the area you operate.

7. Develop hand over standards / check lists to ensure that correctly built / specified vehicles are delivered.

8. Develop routines to ensure the proper selection of warranty programmes. Make sure that you fully understand the operating requirements related to the current 'built-in' maintenance plans. Watch the kilometers not the years!

9. Develop communications within the company to keep managers up-to-date with the model changes, prices, etc.

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