Venson: fleets should look beyond price to avoid hidden procurement costs
Simon Staton, Client Management Director at Venson Automotive Solutions, says negotiating a competitive rate is only the start — operators also need to scrutinise mileage and termination charges, downtime measurement and maintenance definitions before signing a contract hire agreement.
Venson Automotive Solutions has published guidance from Simon Staton, its Client Management Director, on avoiding hidden costs in fleet procurement. Staton argues that choosing a supplier is about far more than comparing prices, and that securing the right agreement from the outset, and actively managing supplier performance throughout the contract, is just as important as negotiating the initial price.
On end-of-contract charges, Staton warns that mileage and damage fees are an easy way for vehicle suppliers to levy significant costs, so operators should ask for examples upfront of how these are managed. He says early termination charges can similarly become a lucrative revenue earner for suppliers if not fully understood, tightly negotiated and monitored throughout the contract.
Staton also advises fleets to ask at what point downtime starts being measured, so that comparisons between suppliers are made on a like-for-like basis.
On maintenance, the guidance notes that 'with maintenance' can mean very different things in practice, ranging from minimal arrangements where drivers book their own servicing, to fuller packages including service scheduling, reminders and vehicle collection and delivery. Staton says it is critical for fleets to clearly define their requirements with suppliers.
The guidance adds that poor customer service carries a real cost, with time spent by fleet teams or drivers chasing updates representing lost productivity that can accumulate significantly across large fleets and long contracts.
On servicing, maintenance and repair, Staton says fleet operators should weigh the total cost of repair — including vehicle downtime, workshop opening hours, parts quality, warranty implications and operational disruption — rather than labour rate alone when choosing between franchised dealers and independent garages.
Sources
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