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All things Pharma

Driving a hard bargain

  

 

Driving a hard bargain

Never mind the healthcare, where’s the health car? Terry Bartlett of Inchcape Fleet Solutions offers some guidelines on choosing the right company car for field sales.

With more than 6,700 makes and models of new car on sale in the UK, drivers face the most bewildering company car choice ever. Among the record number of vehicles available, it is difficult to identify a ‘bad car’. What’s more:

  • Manufacturers are producing an ever-increasing number of niche models for new market sectors, such as sports activity vehicles and grand tourers.
  • Many car makers are attempting to produce cars across every sector of the market. For example, the 4X4 sector used to be dominated by a handful of specialists, but now almost every car maker has an offroader – some, such as BMW, in more than one market sector.
  • When corporate social responsibility is factored in, it is not simply a choice between petrol and diesel: there are now hybrid (petrol/electric) cars from three manufacturers – Honda, Lexus and Toyota.

Selecting a company car can be a minefield. More businesses than ever before are turning to fleet industry experts to help them source the right vehicle for the job.

Born to run

Ensuring the vehicle is ‘fit for purpose’ is perhaps the number one priority for any fleet decision-maker and driver. With sales and marketing professionals in the medical devices sector clocking up thousands of miles a year and transporting valuable goods, a number of issues spring to mind:

  • fuel efficiency – perhaps a diesel car
  • driver comfort – air conditioning, maximum movement of steering wheel and driver’s seat
  • security – immobilisers and ability to hide goods from prying eyes
  • boot space for transporting goods
  • Bluetooth compatibility to facilitate mobile phone use
  • satellite navigation to assist with journey planning, appointment schedules and congestion.

Performance is also vital. High-mileage sales representatives are unlikely to thank their boss or fleet manager for putting them behind the wheel of a so-called ‘city car’. Automatic transmissions should also be considered.

This is not an exhaustive list: it is merely intended to show that choosing the ‘right’ company car is not a 10-second task.

The price you pay

All the factors mentioned above will impact on vehicle cost. But cost runs far deeper than simply the ‘on-the-road price’ of a car. There are two separate cost issues: cost to the company and cost to the driver.

For the driver, the issues are simpler. Typically, drivers will look for the ‘most for the least cost’ in terms of benefit-in-kind tax, while taking into account their job requirements and personal lifestyle. In addition, if the employee pays for fuel used privately, vehicle economy is likely to be a major choice criterion for the individual.

For the company, cost issues are more complex. Most businesses now base their company car choice lists on ‘wholelife’ costs: a calculation made by a fleet management specialist of how much the company car will cost to run on a monthly basis, taking into account every factor involved in keeping that car on the road over a specific period (the benchmark period is three years).

Just because one car has a lower list price than another does not mean that it will be cheaper to run. And where cost issues for the driver and the company are in conflict, this will need to be resolved.

Other factors to take into account for the cost equation include corporate cash flow implications, on or off balance sheet issues, corporation tax and VAT implications. Again, it is little wonder that compiling choice lists requires professional expertise.

Meanwhile, methods of funding – outright purchase, contract hire, contract purchase etc – should be reviewed at least annually to ensure that the chosen routes are the most cost-effective and administratively efficient for the company, as Government and European Commission-inspired fiscal and legislative changes may change the situation. Changes in a company’s business circumstances may also make a funding review necessary.

Between a third and a quarter of all road traffic crashes involve someone who was at work. That means between 800 and 1060 deaths a year. It is therefore vital when specifying a car that its safety features and ability to withstand crashes is taken into account.

Streets of fire

In recent years, two further issues have grown to dominate fleet industry headlines: occupational road risk management and fleet-related environmental concerns. Both fall under the banner of corporate social responsibility.

Driving on business is the most dangerous task most employees will undertake during their working life, according to official figures. The Government and the police are working together with other agencies, such as the Health and Safety Executive, to encourage all organisations to implement best practice occupational road risk management programmes.

Last year, according to Department for Transport figures, 3172 people were killed and 255,232 people injured on Britain’s roads. It is estimated that between a third and a quarter of all road traffic crashes involve someone who was at work at the time. That means between 800 and 1060 deaths a year, compared with 241 fatal injuries in the ‘traditional workplace’. The percentage of occupational drivers injured is similar.

It is therefore vital when specifying a car that its safety features and ability to withstand crashes are taken into account.

The European New Car Assessment Programme was established a decade ago to crash-test new cars and rate their ability to protect occupants, children and pedestrians in a road crash. Vehicle ratings can be accessed at www.euroncap.com, and we would recommend that drivers choose a four or five star occupant safety rated car.

ABS brakes are now mandatory on all new cars, and the number of new models with airbags continues to grow. However, for maximum safety we would recommend electronic stability control. This is designed to prevent skidding, and is now fitted as standard to around half of the new cars on sale in the UK.

Another key factor is whiplash prevention. Thousands of drivers suffer whiplash injuries each year, resulting in many needing time off work. The insurance industry has tested hundreds of cars to assess their ability to protect against whiplash; rating details can be found at www.thatcham.org.

With many healthcare sales and marketing professionals likely to park vehicles in tight spaces, parking sensors (along with a reverse parking camera and screen) may be considered an important feature to prevent dents and scrapes. Lane departure warning systems are also beginning to appear in new models.

Finally, most businesses are striving to reduce their carbon footprint. Selecting the vehicles with the lowest CO2 emission figures should be a key priority. Typically, a low CO2 figure means a high MPG figure; and with fuel usage the second biggest vehicle cost factor after depreciation, this should not be ignored. For drivers, a low CO2 figure also reduces benefit-in-kind tax.

Drive all night

   As can be seen from the above, choosing the ‘right’ car for a medtech sales professional is both an art and science. This article has not even touched on some issues, such as insurance, service, maintenance and repair costs – though these are all taken care of in wholelife cost calculations – and the importance of company car ‘badge power’ for recruiting, retaining and motivating staff.

So out of the more than 6,700 makes and models in the showrooms, which is the most suitable? Well, that depends…

Terry Bartlett is Managing Director of Inchcape Fleet Solutions, which operates more than 56,000 vehicles in the UK and is one of the country’s leading leasing and fleet management companies. For further information, visit www.ifs.inchcape.co.uk, telephone 0870 191 4444 or e-mail info@ifs.inchcape.co.uk.

 

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