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LAST UPDATED ON 18TH APRIL 2006 (DATED BY SARAH EVANS)
TABLE OF CONTENTS
BUILDING YOUR PRACTICAL RENTAL FLEET 2
KEY FLEET ACQUISITION METHODS 3
FINANCE LEASING – BALL OON LEASE & CLOSED LEASE 4
APPRAISING AND PRICING USED VEHICLES FOR YOUR FLEET 5
TEST DRIVE 7
FLEET MIX 9
FLEET SELECTION AND VEHICLE TYPES 10
VEHICLE RECORDS 13
MECHANICAL CONTROL 14
SERVICE CHECK LIST 15
ACTING ON CUSTOMER COMPLAINTS RE – A VEHICLE 16
MAINTENANCE & REPAIR COSTING 17
WORKSHOP REQUIREMENTS 18
EVALUATION OF MECHANIC AND WORKSHOP 20
PREPARING A VEHICLE FOR RENTAL 20
VEHICLE SALES 23
RETAIL SALES 26
NON-MAINTENANCE MASTER HIRE AGREEMENT 30
RETURNING YOUR LEASED VEHICLES 33
BUILDING YOUR PRACTICAL RENTAL FLEET
Fleet Management is the most important function of an owner or manager in a
Practical Car & Van Rental business. The fleet is your biggest asset, often
consuming 80% of your total investment.
A wise owner should view his fleet in the same way as a share portfolio, constantly
reviewing his investment, selling when a profit is available and taking losses early in
A fleet manager must understand that a PRACTICAL CAR & VAN RENTAL
operation is a cash flow business requiring continuous and constant leasing, buying,
renting, returning and selling of vehicles. The flow of money that this cycle
generates allows debts to be serviced, bills to be paid and other financial
commitments to be met.
When acquiring vehicles for the rental fleet, do not set a limit on the cost of any
particular vehicle but rather view the fleet as a whole and work on averages.
If you are renting used vehicles remember quality is the best investment, giving you
a better product to rent and sell and a greater profit margin than a car in average to
poor condition. It is dangerous to buy on price alone. Although the initial
investment is less when you buy vehicles in poor condition, the cost in the long run
through more maintenance, breakdowns and damaged customer relations is far
greater. Also your Practical manager [without notice] can take unsatisfactory used
vehicles off your fleet.
The first stage of any vehicle fleet building policy has to be the business require-
ment of the vehicle. There are key factors that have to be reviewed and forecasting
mileage, demand peaks, business future plans (it can be unwise to lock into long
agreements), financial constraints your budget and current practice are all
important. Once clear then a policy has to be implemented to achieve the ideal
monthly budget and value for money. This could include a New; Dealer Demo or
Used car policy coupled with the method of acquisition that suits the business
It is Practical's policy that no remould tyres are used whatsoever. Tyre treads must
be checked every rental and not allowed out if within 3mm of tread all over the tyre.
Minibuses must have an MOT every year from the first date of registration and all
MPV’s and buses must have even more rigorous checks than an average vehicle.
All Practical minibuses must carry a first aid kit and a fire extinguisher, suitable for
vehicles as approved by the British Standards Association.
New Vehicles must be serviced according to the Manufacturers rules. Any ‘used’
vehicles must be serviced every 6000 miles and Minibuses every 3000 miles. All
work done on a vehicle must be recorded. Accidents in rental vehicles especially if
anyone is injured can involve the POLICE who will want to see your records.
Generally the biggest expense involved in running an owned vehicle is the
depreciation element. Depreciation is influenced by many factors but the areas that
can be manipulated are Purchase price (Buying power) and Resale/Disposal
proceeds (Replacement cycle). There are other expenses such as repair and
maintenance, Road Tax, and all-important funding costs but these can be more
difficult to influence than depreciation. Depreciation and ways of minimising its risk
has led to the great increase in the number of vehicles on a form of “lease” plan due
to VAT advantages. The “Nodes” on replacement cycles are important and are
normally set from previous experience. These nodes are influenced by the term of
the agreement (period of retention), cumulative mileage’s (i.e. Used Buyer pressure
@ 18k or 35/40k) and reliability (down time and actual maintenance spend).
ECONOMIES OF SCALE
Basically this is an efficiency and advantage achieved by businesses specialising in
their key functions and becoming skilled at their trade through various processes
and their size of operation. Contract hire and Rental companies open up this facility
to smaller car operators who can then share in the savings brought about by the
Buying Power and Disposal skills of that company.
Do not underestimate the value of this in your final decision making.
KEY FLEET ACQUISITION METHODS
OUTRIGHT PURCHASE – OWN FUNDS
Still a popular option in which the business pays in full for the vehicle immediately,
using its capital. Flexibility to sell the vehicles as and when it feels appropriate and
own Write Down allowance is claimed. This is often considered an unproductive use
of capital unless the vehicle is retained on a long change cycle, or the business is
very cash rich.
OUTRIGHT PURCHASE – BANK FUNDS/OVERDRAFT
Used less often as the business is paying a cost for the funding and although
offering immediate ownership, there is a financial commitment to consider before
selling. This reduces effective disposal flexibility but Replacement Cycle “Nodes”
can be more advantageous in Overdraft funding.
Again, this use of a business line of Credit is often viewed as unproductive. The
Overdraft option has some advantage in periods of falling interest rates but can
have little protection from later interest rate increases. Interest costs can be claimed
against Tax. Both Facilities offer little opportunity for accurate or fixed budgeting.
DEFERRED PURCHASE – HIRE PURCHASE/ CONDITIONAL SALE
Hire purchase is similar to the two previous plans. The business hires the vehicle
making payments up until the final instalment where a further fee is paid in addition
to acquire title to the car.
DEFERRED PURCHASE – LEASE PURCHASE
Similar funding package to Hire Purchase, except that a Residual Value or balloon
may be set to reduce monthly payments. The final settlement of the balloon triggers
ownership or title to the car and in both options interest costs are usually allowable
Both qualify for write down allowance and can offer reasonably accurate budget
planning and forecasting. Both assist cash flow.
FINANCE LEASING – BALLOON LEASE & CLOSED LEASE
The vehicle is acquired on the basis of a lease agreement on a predetermined
period (similar to the closed lease). A Residual Value, estimated to leave a disposal
surplus or “equity”, is used to reduce monthly rentals. The Structure is flexible in
that a secondary period can be entered into BUT title of the car can never be taken.
The car is, however, still on Balance Sheet as an asset.
This configuration enables VAT reclamation off funding (Invoice) and enhances the
cash flow and other savings in interest costs.
Both plans offer good budget forecasting and retain the business line of Credit.
OPERATING LEASE – WITH MAINTENANCE
Another lease variant with a key difference that the lessor carries the full Residual
Value risk. Also incorporating the risk on maintenance costs and other add on
packages if required such as relief vehicle, GAP Insurance, accident management,
Road tax and others.
All aspects of acquisition, funding and disposal are handled and a fixed rental cost
over a given term that enables very accurate budgeting and the VAT reclamation is
made to improve rental costs. Out source of “Nodes” expertise via Leasing or
Contract Hire should minimise Depreciation.
OPERATING LEASE – WITHOUT MAINTENANCE
As above without any provision for maintenance (although other packages could be
provided). Both are very effective on cash flow.
Features Outright Bank Loan Hire Purchase Finance Contract Hire
Purchase Overdraft & Lease Lease
Minimum Initial Capital * * * *
Extra credit Line * * *
Interest rate fixed * * *
Fixed repayments for * * *
budgets & Cash Flow
Vehicle as security * * *
Off Balance Sheet *
Ownership of vehicle * * *
Use of own writing * * *
Rental allowable * *
No vehicle disposal *
Administration reduced *
Road fund Tax in- *
Replacement vehicle in Yes & No
case of breakdown
Fixed maintenance *
No Depreciation Risk *
VAT on rentals * *
APPRAISING AND PRICING USED VEHICLES FOR YOUR FLEET
What is the difference between appraising and pricing?
Appraising is both the actual physical inspection of a vehicle and the assessment of
the required reconditioning costs.
Pricing consists of determining the trade value of the vehicle once reconditioned and
evaluating the overall saleability and demand for the unit.
Always remember when purchasing vehicles your ultimate goal is to resell them at a
profit. When "pricing" out a vehicle, always ask yourself "what the car will sell for at
the end of the rental period?"
Being able to appraise used cars and vans well is not a gift or sixth sense but rather
a skill that can be taught or learned by anybody. There are two basic rules that, if
followed, will minimise mistakes:
1) Stay with a system
2) Be methodical and take your time
It is recommended that appraisal sheets be used when looking at vehicles, as they
will tend to reduce the chances of a buyer missing any defects or flaws.
There are three basic areas to be appraised:
1) The exterior
2) The interior
3) The drive train
The first items to check for on a vehicle are body damage and paintwork. Check for:
a) signs of rust
b) repainted panels indicated by mismatched paint and over spray
c) accident damage which has been repaired and indicated by rippled
body panels, ill fitting body parts (doors, boot, bonnet)
Most cars are repaired at one time or another during their life. When appraising we
are trying to determine the reasons why. Was it involved in an accident? Was there
serious rust? Was the paint job done for strictly cosmetic reasons? Although a
repaired car is not necessarily a bad thing, it should act as a "red flag" alerting you
to any other possible problems. When pricing a vehicle, take into account that a
repainted car is worth slightly less than a vehicle with original paint.
When checking for rust, be sure to inspect the car thoroughly:
- door sill
- wing wells
- floor jambs
- inner wings
- wheel wells
- boot floor
Most used cars will have some surface rust. This is not a major problem if it can be
controlled. Vehicles with extensive rust or poorly repaired rust damage should
never be purchased for a rental fleet, as they have no re-sale value.
Repaired accident damage on a used car can greatly affect its re-sale value and
roadworthiness. If you suspect that a car has been involved in a serious accident,
take extreme caution when appraising.
a) frame damage
b) welding marks
c) new body parts (i.e. wings, doors, bonnet)
d) complete repainting combined with rippled
In vehicles that have front wheel drive and unibody construction a front end accident
can make the vehicle virtually worthless. It is almost impossible to repair these cars
To accurately view the vehicle, you should look at it from several different angles at
a distance of approximately 10 feet. This will enable you to spot different shades of
paint and any metal that has been "worked" or has had body filler applied. Being
able to spot the minor defects on a used car is a sign of a good appraiser and can
save you thousands of pounds over a period of time. Do not forget to check all
exterior parts of the car including lenses, hubcaps, chrome or plastic trim,
windscreen and mirrors. When inspecting the tyres make note of the type as well as
wear. Uneven wear on the front tyres could indicate front-end problems such as
alignment or brakes. Uneven wears on rear tyres could be a sign of a "tracking"
problem usually caused by frame damage.
A thorough inspection is a great help in deciding the value of the vehicle. The overall
condition of the interior will often indicate true mileage and the history of the car.
Carpets shrinkage, rips and unusual wear.
Seats type (bucket, bench, split bench) material
(Vinyl, cloth, velour's) rips wear patches,
stains, burn holes.
Door Panels rips and cracks, missing parts such as door knobs,
window winders and switches.
Glove Box manuals, invoices, registrations, anything indicating previous use or
Hardware light switches, wiper controls, heater and air conditioning, radio,
horn, indicators, rear window demister.
Boot spare tyre, jack, rust welds or accident and leaks.
Miscellaneous handbrake, seat belts, seat bracket movement,
side mirrors, rear view mirror and signs of water leakage.
N.B. When paying extra for options such as power steering, electric windows,
central locking, and air conditioning make sure they work properly as they are
expensive items to repair.
Drive Train and Mechanical:
Start the motor and immediately check for abnormal noises:
- Knocks or internal rattles
- exhaust or manifold leaks
- starter motor
- lifter, tappet or cam noise
Inspect under the bonnet-taking note of:
- engine oil (whitish oil indicates water mixture)
- transmission fluid condition (check for discoloration
and burnt smell)
- radiator (overheating and leaks)
- oil leaks
- engine size
- running condition, engine miss, low or fast idle
Inspect exhaust smoke:
- blueish smoke indicates rings or valves
- black - poor carbonation
- light white (almost steam) indicates cracked
head, head gasket or block
Use your appraisal sheet while inspecting the vehicle, making notes of any costs
that might be incurred for reconditioning.
You should never offer or discuss price before driving the vehicle. The purpose of
the test drive is to determine:
- smoothness of transmission (shift should be crisp and uniform)
- engine top noise e.g. cam or engine
- bottom end noise e.g. big ends
- front end - check for play or pulling
braking problems such as pulling, fading, grabbing or unusual noises
- uneven wear on the discs or pads
- rear end noise and rear wheel bearing noise.
Allow at least ten minutes for the test drive, giving the vehicle time to reach proper
operating temperature. The test drive allows you to gauge the roadworthiness of
the car and an opportunity to compare overall condition to the mileage shown on the
When the test drive is completed, you should have an accurate idea of the recondi-
tioning costs, however, quickly re-check the vehicle in case you have overlooked
something. Total up reconditioning expenses and enter on your appraisal sheet.
To ‘properly price a vehicle’ is to determine what classification the vehicle will be
once reconditioning has been completed. I.e. A vehicle with 30,000 miles that
needs a new gearbox should not be classified as average plus the cost of a gearbox
but clean less the cost of repairing the gearbox. When the appraisal is finished,
make a note on the appraisal sheet as to what category the vehicle falls into.
Judging the saleability of a vehicle is the hardest part of calculating the purchase
price because there are so many variables: car market, time of year, economic cli-
mate and availability. It is important to you as a Practical Car & Van Rental owner
that you learn your local used car market as quickly as possible. Do this by talking to
local new and used car dealers, checking the classified section of the newspaper
and reading any literature pertaining to car sales.
What is meant by profit margin?
The margin is the spread between total capital cost and retail value.
A vehicle that trades for £5,000 and retails for £6,000 has a profit margin of £1000.
The margin that you have in a particular vehicle helps to determine the length of
time on rental fleet.
The buying public dictates the retail value of used vehicles. A car is only worth what
someone is willing to pay for it. Trade dealers arrive a value by deducting the gross
profit they need per vehicle from the retail price. It is for this reason that as a
professional buyer you should familiarise your self with the local retail market. This
is a learning process that often takes months to get the feel of.
Both CAP and GLASS'S guide should be used:
CAP Black Book published by Glass's Information Services Ltd
CAP Motor Research Ltd., 1 Princes Road
Capitol House, Weybridge,
Bond Court Surrey.
Leeds. KT13 OBU
Tel No: (0870) 122 2211 Tel No: (01932) 823 823
Fax No: (0113) 222 2001 Fax No: (01932) 846 564
Used light trucks and vans are evaluated more by their condition and mileage rather
than model year. This is due to the relatively small changes in body style over the
years and retail buyers being more concerned with the vehicle's functional use as
opposed to its style.
FACTORS AFFECTING VALUATION
a) Area/Region - Can be affected by nearby motor auctions or
current conditions to convert business.
b) Condition - Mint, poor, worn out look etc.
c) Mileage - 49,000 is better than 50,000 for resale over
60,000 miles can be difficult.
d) Age & Reg Letter - The Reg letter change will affect valuation for
(e) Desirability - i.e. Ford and Vauxhall, can usually hold their
prices better than the rest but there can always be
(f) Size - At present some smaller, higher specification,
Fuel-efficient can hold value better than large vehi-
cles with low fuel consumption.
(g) Fuel Consumption - Always an important consideration, diesel
vehicles are always in demand and can command a
(h) Specification - Hatch/Saloon/Estate & Automatic.
Small/medium/large size. Roofrack/radio cassette/
central locking etc.
(i) Conventional Type - e.g. Family hatchback - manual up to 1.4cc have
(j) Current Market - If demand is greater than supply, prices tend to
stabilise, less depreciation occurs but higher
prices will need to be paid. If supply exceeds
demand opposite could happen. As a rule of
thumb, near to Christmas Nov/Dec is the best
time to buy but not sell. Used selling improves in
the spring and summer period. Plan accordingly if
The usual breakdown of a Practical fleet is 55% cars and 45% vans. Amongst the
cars we recommend a start of 50% small and 50% medium size. Amongst the vans
initially we recommend an even split between light and one ton vans. A Luton size
van should be added as demand dictates. Luton’s or Minibuses should not be
purchased initially until some interest has been established.
Fleet mix at the start up should be about 80% cars and 20% vans.
Seasonal renters such as tourists will cause a small rise in demand for estate cars
in the summer but always keep your fleet slightly lean on estates as their demand in
winter tails off dramatically. M.P.V’s are very popular and you are recommended to
start these in the early summer.
The most accurate method of deciding the correct fleet mix for your location is by
using the customer demand sheet (see the Rental Counter section). But we do not
draw conclusions in the first two months of operation. Demand will be erratic at first.
We have some demand for automatics but they should only be included in the fleets
of locations that have experienced sustained demand, usually airport locations who
deal with a lot of tourists.
Recommended Vehicle Price Mix Guidelines - Typical Models
Most rental companies relate rental charges directly with size of vehicles, thus a
hatchback is always the cheapest. But our system is more flexible allowing you to
maximise your capital investment. It also gives the customer more choice, i.e. he
can take a small car at the cheapest rate for a larger but older saloon.
Group 1 5% 3 door hatch up to 1000cc
Group 2 10% 3 door hatch up to 1300cc
Group 3 15% 5 door hatch or 4 door saloon up to 1400cc
Group 4 10% 5 door hatch or 4 door saloon up to 1600cc
Group 5 5% 5 door hatch or 4 door saloon up to 1800cc
Group 6 5% Executive cars up to 2000cc
Group 7 5% 7/8 Seater person carrier
Light vans 5%
The above is general guide only and there is no set formula on how to establish a
specific rate for a particular vehicle but you must consider all of the following points:
1) Mechanical condition
2) Cosmetic appearance
3) Inventory value - higher costing vehicles command a higher rental
6) Year of vehicle
Our advertising is designed to catch the eye. You do not need more than 5% Group
Mini 1000cc Mini 7– 8 cwt
Economy 12000cc Economy SWB One Tonners
Compact 13000cc Compact LWB One Tonners
Intermediate 1600cc Intermediate 1-3.5 Tonners
Standard 1800cc Standard 3.5 Tonners
Full Size 2000cc Full Size 7.5 Tonners
Premium MPV’s Premium Minibuses (all
FLEET SELECTION AND VEHICLE TYPES
In selecting vehicles for the rental fleet, there are several factors, which should be
taken into consideration:
Owned Vehicles Can the vehicle be sold at the end of the rental term? and still
produce a profit? This is by far the most important considera-
tion. Generally speaking, due to our competitive pricing and
effective marketing customers will rent all sizes, makes and
models that we make available. The decisive factor therefore is
the vehicle's disposability and not its rentability.
Leased Vehicles Does the lease start and end on suitable dates? e.g. a vehicle
due to return just before Christmas can be very disruptive. Is
the mileage allowance realistic, you will need 2000 per month.
Can you influence the colour? Fuel tyres, spec? Is the vehicle
rentable and is there a demand for it? Is the vehicle in good
enough condition for fleet and is the quality acceptable to my
customers? Will the vehicle require frequent or expensive main-
tenance while on fleet? Is the nearest Main Dealer a long
way away from your site? Does the price of the vehicle allow
you to keep within your projected averages and make a profit
margin over holding costs?
If all these requirements have been met, you have selected a perfect rental vehicle.
One thing to remember is that there are a lot of very low maintenance cars that are
You may choose to lease vehicle from suppliers other than Practical, ensure all the
terms suit you not just a cheap price, often a cheap price is traded against low mile-
The following pages contain some general guidelines for vehicles you may consider
for your fleet. It is recommended that you keep informed about specific problems
with certain models by subscribing to Trade Magazines and Consumer reports.
HATCHBACK - 4 CYLINDER (900cc to 1300cc)
General Comments Very strong rental demand
Low depreciation rate
Poor selection available in used market
Perform poorly in extreme weather conditions
Body Built with quite thin metal that causes rust problems
Expensive body repairs can result from minor accident
MEDIUM SIZE (1.6 Litre)
General Comments Good rental demand
Average depreciation rate
Fairly good resale
Good Selection in used car market
Most models fairly low maintenance
Where possible try and get 'five doors' in this range
Engines Average fuel economy
Body No major problems
Style usually allow 4 adults to travel comfortably
LARGE 4 DOOR
General Comments Limited rental demand due to petrol consumption
It is recommended when selecting full size cars
to buy models fairly well equipped (Power Steering,
Sunroof, etc) as full size 'plain Jane's' are difficult to
Engines Lower than average fuel economy
No major repair problems on most models
Body Enough room for family of four to six adults to travel
General Comments It is necessary to have larger engines in estate cars
Body Tailgates tend to rust on bottom lip Pay special
attention to shock absorbers and axle noise if previously used
LIGHT and ONE TON VANS
General Comments Extremely good rental units
Good resale value if maintained properly
Tend to suffer more wear and tear than passenger vehicles
RENTAL VEHICLES SUITABLE FOR LONG DISTANCE TRAVEL
These vehicles should be of above average standard preferably new:
a) Mileage - low miles
b) Brakes - if less than 50% replace
c) Tyres inc. spare - no re-moulds (min tread 3mm over all tyre)
d) Electrical system - alternator, starter, battery must be
load tested for performance
e) Transmission - no noise - road test for proper shifting
f) Rear end - no noise from this area at all such as: axle
bearings, internal gear noise, drive shaft and 'U' joints
g) Interior - very clean, no rips in upholstery
h) Exterior - no body damage, glass damage or rust
Special requirements for continental travel:
Triangular warning sign if no hazard lights Adequate breakdown cover
Door mirror both sides GB sticker
First Aid Kit Minimum tread 3mm
Spare bulbs and fan belt Headlight alignment stickers
Should be classified for long distance travel in the same manner as cars. If pick-ups
have a canopy installed, check to see if canopies have become loose over time,
they should be firmly bolted.
It is most important that vans should have very little body damage, as they are
mobile advertisements for Practical. Park them on the front line of your lot. The
initial pre-fleet on vans may take slightly longer than cars but the on-going
maintenance is lower. Vans are usually kept on rental fleet slightly longer than cars.
SOURCE OF FLEET
If you are a trader, you will have a number of options as to where you can find fleet
vehicles. A good buyer tries to establish a contract that will provide a constant flow
of vehicles that will suit his needs. By developing a good supply of used vehicles
you can eliminate a lot of leg work and wasted time. Speed is the name of the
game. If you find yourself spending one day a week at an auction and only buying
one car a month, that car has cost you thirty-two working hours.
Time wasted trying to buy for your fleet is better spent marketing your business.
Non motor traders are advised to lease all their rental vehicles.
NEW CAR DEALERS
A new car dealer’s major source of used cars is the trade-ins on new models. The
advantage of buying from a franchised dealer is that you by-pass the middleman,
i.e. trader or auction. The disadvantage is that the process is very time consuming;
you might spend hours bidding on cars to lose them to another trader for £25. A
new car dealer's reason for trading is to keep their inventory clean of old stock.
Therefore they often sell 'packages' of old car, i.e. three bad ones for every good
USED CAR DEALERS AND TRADERS
This type of dealer makes his living by buying and selling used cars for a profit.
Their main source of vehicles is usually new car dealers and auctions. The
advantage of buying cars from them is that you can pick and choose which vehicles
as opposed to buying packages. They may also bring vehicles to your location,
which saves a great deal of time. The disadvantage is that the vehicles are slightly
higher priced than those from a new car dealer. Some of the less reputable dealers
can be a problem to deal with (bounced cheques or misrepresented vehicles). There
is often no recourse when you buy from this source.
Auctions usually require the seller to disclose any major defects on a car, however,
you still must appraise all vehicles thoroughly before bidding.
DISADVANTAGE OF BUYING AT AUCTIONS
Very time consuming, sometimes taking a whole day to buy one car.
Very competitive bidding results in high trade prices.
Lack of facilities for proper appraisal which can cause serious miscalculations.
We recommend that you use sources 'A' and 'B' for buying vehicles and use the
auctions for selling.
It is possible sometimes to buy vehicles at trade prices from private sources but
there are pitfalls Stolen vehicles. Never buy a car from anyone but the registered
owner. Check I.D. against title and do an H.P.I. search (see National Buying for
joining HPI). Check the smallest details when you have received the Search, such
as Petrol or Diesel etc. Buying privately can be very time consuming and as a rule
most people are expecting a retail price for their vehicle.
Your master fleet list must be kept current and every vehicle put on fleet must be
MASTER FLEET LIST
The purposes of this list are:
1) To ensure the vehicle is insured, this is a legal requirement.
2) To assign the next consecutive unit number to a vehicle that has
been put on your fleet for rental.
3) To have a complete record of every vehicle ever purchased and
every vehicle sold with the selling price.
When a vehicle is obtained for the Rental fleet, it is identified with a Unit number.
This number will be used for sorting lists and shows the order in which each vehicle
goes onto the fleet.
As soon as a vehicle is purchased or leased for the fleet enter this information into
Fleet management, Revolution will allocate the next consecutive Unit number. Your
Revolution software will prompt you every 7 days to submit your MID list.
Even if a temporary vehicle is used once for one day must have a unit number and
be counted as on fleet for Usability and Expense purposes.
The action of putting a vehicle on the computer automatically opens a Service
History Folder. This must be updated as you undertake repair work of any kind on
the vehicle, including RFL & MOT’s.
As each rental closes the revenue earned is recorded to the vehicle file and it is
possible at a glance to see what a vehicle is costing and earning you.
A FILE FOR EACH VEHICLE ON FLEET
A file folder should be opened for the paperwork connected to each vehicle as it is
obtained for the rental fleet. A colour coded hanging file system works very
effectively. Each file should contain the following:
Copy of the Purchase Agreement or Lease Agreement
Original first check-in slip
Colour photos of the vehicle
Vehicle Registration Document (or a copy, if an owned vehicle)
HPI search, if purchase from a private sale
Service Inspection sheets and all internal Job Sheets
MOT Certificate (or a copy if required by law)
Service books inc. key and radio codes
This file is organised by unit number and remains in the filing cabinet until the
vehicle is taken off the fleet or sold.
The tab of the file folder should show the Unit number and vehicle registration
number. Once the vehicle is sold you may discard documents not given to the
(if doing your own repairs)
The objectives of the Practical Car & Van Rental maintenance programme are:
a) To manage your mechanical shop cheaply and smoothly.
b) To keep your rental fleet operating reliably and within the Practical Car & Van
Rental safety standards.
To ensure communications flow in both directions between the owner and the
mechanic by having regular monthly meetings to review the entire fleet.
You need to have a good mechanic who will assist you in the following areas.
Parts pricing and work orders.
Good contacts for better parts prices.
Feasibility and cost effectiveness of all major repairs.
To help in inventory control and have the required amount of stock in hand.
To keep shop productivity at its highest level at all times.
To properly service all rental vehicles on a Service Check List
Your mechanic should be a certified mechanic of at least ten years experience as a
'General Mechanic' or have been responsible for maintaining a fleet of vehicles. He
should be able to 'trouble shoot' problem cars.
A good mechanic is a hidden Public Relation's man that will save your thousands A
good mechanic will save pounds in unnecessary expenses and maintain your fleet
with the minimum of customer breakdowns. His first concern for your fleet is 'Safety
He should be able to diagnose a mechanical problem and be able to perform the
required repairs. If in doubt, he should be willing to consult the owner or another
Practical Car & Van Rental mechanic.
He should be willing to consult you on all major repairs and recommend vehicles
that need to be disposed of prior to their 'turnover plan' because of a major problem
or because they have depreciated more quickly than expected.
He has to prove his honesty to you from day one.
He must use your purchase order system when buying all parts. He must inform
you of major bulk purchase and shop for the best prices available. He has to be
able to organise the priority of work orders, the shop and most of all himself.
SERVICE CHECK LIST
PRE – FLEET SERVICE – USED VEHICLES
Approximate times:- 2 hours on 2 or 3 year old model
3 hours on 3 to 4 year old models
A pre-fleet service must be completed in full on each vehicle before it joins the rental
fleet. Follow the Service CheckList to check over all areas in proper sequence.
PREVENTATIVE MAINTENANCE SERVICE (5,000 Miles)
(Approximate time 1 to 2 hours)
Every vehicle must have a service every 5,000 miles. This programme has been
developed through years of experience and must be enforced on each rental
vehicle. Practical Car & Van Rental's entire system and image is based on your
carefully followed maintenance programme. Our insurance premiums are strongly
related to the mechanical fitness of your vehicles.
Follow the Service Check List to check all areas in the proper fashion. Any history
of the vehicle's performance should be noted in the remarks section of the Check
List. If the vehicle is deteriorating more quickly than estimated, possibly due to
customer abuse, it may be re-scheduled for sale sooner than originally planned. It
is the responsibility of the mechanic to inform the owner of specific problems. This
is why his attendance is so necessary at the monthly fleet meetings. After the
inspection is completed, a new lube sticker must be filled out and placed on the air
Serviced at …………………………
The service Check List also has provision for two other types of servicing which
First (500 Mile) Service - This applies to NEW vehicles only.
Intermediate (3000 Miles) - This is an optional function in the case of cars and
vans but COMPULSORY on minibuses.
The Check List has further functions. It can be used instead of a workshop invoice
as it provides a parts inventory. It will also provide a note to the owner/manager of
any impending work required.
All Service Check Lists must be kept in the appropriate RED FILE for each rental
vehicle. In this way you are building up a service history which can be a valuable aid
when selling the vehicle.
ACTING ON CUSTOMER COMPLAINTS RE – A VEHICLE
If a customer complains about the condition of a vehicle, record details of the
complaint at the time of the check-in. All customer complaints should be thoroughly
checked out as our system is based on the complete safety of our vehicles.
If necessary the customer may need compensation, a credit offered on the next
rental can often be the best option. When making out the workshop list, every effort
should be made to explain the problem as clearly as possible in order to eliminate
the mechanic spending time trying to isolate the real problem e.g:
Brakes - pulling to the right
Front end - seems to wander on road
Stalling - at every stop
The lot person should park the 'shopped 'vehicle in an area that is assigned for
these vehicles. The keys are returned to the counter person and they are placed in
an area designated for 'shop' on the keyboard. The check-in slip is dated and
placed on the shop area of the keyboard and it remains there until the vehicle is
repaired. When the repairs are completed it is then moved to the 'clean' area on the
keyboard to inform the lot person that it is now ready to be cleaned. By dating the
check-in slips you know exactly how long the vehicle has been in the shop and
possibly a quick review with the mechanic is in order. The ‘T Card’ also is moved to
the “out of service” column.
Remember, every time a vehicle is shopped, it costs you money both in:
1) Loss of revenue
2) Cost of repairs
The mechanic looks at the workshop list and schedules the vehicles for repairs.
Each item on the list is evaluated for its seriousness, length of repair and scheduled
for priority. Naturally, the minor repairs and service inspections on rental vehicles
receive first priority. Every 'shopped' vehicle is road tested for a quick analysis
before tying up shop space.
The quickest way to determine priority in the shop is by the needs of the rental
customers and the ease of repair. The mechanic makes sure that all parts used are
recorded on the left side (Parts Only) of the job sheet. The nature of the repairs and
the approximate time spent are recorded on the right side. Labour charged should
be at a reasonable internal rate, not at retail, i.e. £18 per hour.
After the job sheet has been completed and the vehicle has been road tested to
safety standards, it is then returned to the clean area for the lot person to prepare
The mechanic informs the counter personnel to remove the check-in slip from the
'shop' area and place it on the clean-up' area of the keyboard. This tells both the lot
person and the rental counter that the vehicle is now ready for clean-up.
It is important that the mechanic records every part that was used for the vehicle on
the repair order so as to account for the parts properly and balance your shop
inventory. If a part is purchased especially for that repair and not a stock item, then
the Parts Invoice or Packing Slip along with the Purchase Order is attached to the
back of the Repair Order. Every three or four days the mechanic gathers together
all of the completed repair orders and brings them to the owner/manager. If the
mechanic is unaware of the exact cost of the parts, then it should be left unpriced
and the owner should properly price out the parts.
MAINTENANCE & REPAIR COSTING
Every week the job sheets must be totalled and invoices raised. Costs are entered
into service history on your computer. The total spent at the end of each month will
be used to complete your Profit and Loss account. The Pre-fleet selection consists
of work done on vehicles after purchase to get them up to fleet standard. The total
of this column will appear in your Summary Report only. It will not appear on your
Profit and Loss because the pre-fleet is capitalised, i.e. added to the value of your
car and not expensed.
In service History; choose “Body Work”, every time you pay out for body or other
repairs directly resulting from collision damage. Similarly every time you receive
money for damage either from a renter or our own insurance company, do not enter
it until actually received. At the end of the month there will be either a net paid or
collected figure between these two columns and it will appear as such in the Profit
and Loss account.
JOB SHEET FLOW CHART
1. Problem is entered on shop list.
2. Mechanic schedules his work priority from shop list.
3. Mechanic records all parts, labour (not labour if mechanic employed by
4. Practical Car & Van Rental) and type of repairs done on job sheet.
5. Job sheet is brought to owner for pricing if mechanic is in doubt.
6. Job sheets are totalled every week and entered onto Service History per vehicle.
7. Job sheets are separated and the top copy is filed in the Vehicles Red file and
the hard copy is held in the mechanic's file in the shop.
Mark all new parts with a small line of yellow paint, i.e:
tyres and rims
spare tyres and jacks
This will enable the lot person to check quickly if the customers have exchanged
parts in your vehicle.
When marking tyres, they must all be marked consistently in the same way. Spray
a small straight line across the rim and tyre. It must be small enough not to be
noticed by the customers but large enough to be seen by your lot person.
ANTI – FREEZING VEHICLES
Depending on your geographical area, you should start your anti-freezing pro-
gramme in September or early October. The best approach is to start buying
anti-freeze in the summer or early autumn. Prices are generally cheaper than later
in the year when the rush hits.
The best way to tackle the anti-freezing is to photocopy your rental and sales fleet
lists and do every vehicle as and when they appear at your location. Anti-freezing
should be given priority over maintenance. All long term rental vehicles should be
asked to visit the location for anti-freezing. As the vehicle is treated, line it through
on the lists with a yellow marker.
Whenever a part is purchased, a purchase order must be written up with the
following information on it:
Name of supplier
Description of part
Signature of mechanic/owner
A triplicate purchase order is best. The original copy goes to the supplier, the
second copy is stapled to the work order and the third copy remains in the purchase
order book. It is advisable to use one purchase order for each vehicle instead of
The purchase order system is the only control of parts being purchased and
purchase orders should be matched up with invoices before payment. Inform your
suppliers that they need a purchase order before payment will be made.
Remember a Purchase Order is a LEGAL INTENT & once a written order is
accepted you are and can be made to pay for what’s ordered whether you still need
it or not.
BASIC WORKSHOP EQUIPMENT
- Air Compressor, 3 h.p. motor
- Water lines
- Air lines
- Floor jack (essential)
- Tyre pressure gauge
- Cooling system pressure tester
- Exhaust hoses
- Hand lube gun
- Fire Extinguisher
- Bench vice
- Hand oil pump
- Battery Charger
- Electrical system checker
- Battery tester
- Anti-freeze tester
- Headlight aimer (or devise home-made aim spots)
- Heavy duty booster cable
- Vacuum cleaner - wet and dry canister
Any special tools or equipment can be rented quite reasonably from your local tool
BASIC WORKSHOP SUPPLIES
- Drum of multigrade engine oil
- Drum of transmission fluid
- Drum of anti-freeze
- 25 gallon pail gear lube
- Bearing grease
- Battery clamp
- Common points, plugs and condensers
- Oil filters
- Gas filters
- Light bulbs, 1157, 1034
- Assortment of fuses
- Wiper blades
- 6 h.d. flashers
- Petrol line hoses (fuel line)
- Vacuum line hose
- Thermostats and gaskets
- Petrol can
- Radiator caps
- Carburettor spray cans
- Graphite for locks
- Silicon spray
- Cloth wipers
- Cleaners and soaps for shop floor
- Hand and car wash soaps
- Container for waste oil
BASIC WORKSHOP RULES
- Keep the shop clean
- Sweep floors daily
- Empty rubbish bins daily
- Put tools away at the end of the day
- Turn in all completed repairs to be done
- Check with owner for any major repairs to be done
- Road test cars after repairs completed
- Write purchase order for each part purchased
- All parts invoices must have a unit number
- All Service Check Lists must be dated and signed
- Maintain a telephone list of local suppliers
- Always obtain competitive prices
EVALUATION OF MECHANIC AND WORKSHOP
a) Cleanliness including both workshop area and the mechanic
b) Organisation of workshop in scheduling job sheets for each day.
c) Job sheets being filled in properly with all parts listed and work performed.
d) All Pre-fleets and Service Check Lists are properly filled out, attached to repair
order and filed in each Vehicle File.
e) Maintenance costs are in line with the National Averages, i.e. £35 per vehicle on
fleet per month.
f) Number of repeats and comebacks. Good communication flow between shop,
counter and owner.
PREPARING A VEHICLE FOR RENTAL
After the rental vehicle has been pre-fleeted it is now ready for a complete and
thorough clean up:
- Boot area
- Engine area
It will take two or three hours to do a proper valeting. If you have a problem with
staff available, you should make a deal with a professional valet shop and have all
your vehicles valeted professionally. Areas to pay special attention to:
- Floor mats - to protect the carpet
- Carpets and cloth seats - may need shampooing
- Dash, door pads, vinyl trim
- Paint, portable hand buffer
- Wheel Trims
- Clean and polish chrome
- Boot area
- Tie down spare tyre and jack parts
- Seal or repair any water leaks
For vans and pick-ups, you may want to invest in a spare tyre mount. Mount on the
doors of the vans or on the front bumpers of the pick-ups. This makes it very easy
during check-in procedures to spot a missing spare tyre. Do not leave the spare
tyres loose in the back of the vans or there is a chance that they will not be returned
with the van.
Bolt down plywood to the floors and sides of the vans to protect them from abuse
PROPER PRACTICAL CAR & VAN RENTAL IDENTIFICATION
Vans MUST have stickers showing the Practical Car & Van Rental logo and your
telephone number on them. These stickers must be placed according to the Make
and Model and in the correct Practical style format, which you can download from
All vehicles must also have a Practical Tax disc and Breakdown Service Holder.
We supply Stickers for the rear of cars.
We also supply ‘Weight and height’ stickers to be placed in the drivers area for
Key Fobs must be made for every vehicle but be warned not to write in full
registrations. It has been known that Rental Keys are targeted as it is easy for the
thief to find the vehicle in a car park or suchlike.
Every vehicle on the rental fleet must have spare keys. Before the vehicle is rented,
spare keys should be cut and kept in the SAFE. A paper tag is quite sufficient but
make sure again you identify the vehicle keys properly by unit number, not by
Registration Number, which only assists Thieves.
If you give out spare keys, make certain you mark the rental contracts accordingly
and charge the customer for duplicate keys if the originals are not returned. Apart
from the obvious necessity of requiring spare keys if the renter loses the original set,
a spare set is essential if you are forcibly repossessing the vehicle.
For each new vehicle added to the rental fleet, two check-in slips must be filled out.
One to be filed in the Vehicle File and the other to be placed on the keyboard when
the vehicle is ready for rental.
Besides the Rental Agreement, the Check-in Slip is one of the most important legal
documents we have in our business. How else can you keep control of the
customers damaging your vehicles?
The Check-in Slips should be filled out very clearly and legibly so the rental staff can
read them and interpret the recorded damage.
All damages to the vehicle should be marked on the check-in slip in a way that the
customer can easily identify. Mark actual dents with "X" and scratches with a fine
line on the slips. It is not necessary to mark rust spots on the slip or tiny door chips
as they are not the customer's doing.
When damages are noted on the check-in slips, they must be taken directly from the
vehicle and not copied from an old check-in slip. It is amazing how a small scratch,
if copied several times, expands to cover half the vehicle.
Controlling fuel levels in our business can cause problems. How can we tell if a
vehicle is returned as full as it may have been rented? Without your own fuel
pumps a lot of money can be lost if handled incorrectly. It depends how easy it is
for you to fill up, many franchisees run empty to empty. If you wish to provide full
tanks to renters the following advice is important. When the vehicle is first put on
fleet, fill the fuel tank to the top. The actual gauge indicator may read well beyond
the "full" mark.
Place a stroke on the check-in slip exactly where the gauge indicates and that is
where it should be when the customer returns the vehicle. To eliminate any
customer objections of "I just filled it" when you know that it is not exactly full,
explain this level reading to your customer at the beginning of the rental. Show the
customer how you mark the gauge on the slip and explain that it must show in the
same place on return to ensure a full tank for the next customer.
Keep in mind that some vehicles take a long time for the fuel gauge to move down.
A customer who has only driven a short distance may not have topped up the fuel
tank and you will have to judge the fuel used by the miles driven. Use your own
discretion in this situation. Be fair to both yourself and the customer.
If you do not have your own fuel pumps, ask each customer to return the vehicles
full. A sign should be posted in your reception area to this effect.
If a customer insists that he has just filled the car, explain that you always
double-check each vehicle to ensure a full tank for the next customer. Explain that if
it takes over a pound's worth of fuel he pays and if it is under a pound you pay. This
will eliminate customer objections.
SERVICE DUE MILES (PREVENTATIVE MAINTENANCE)
Where does this information come from?
During the Pre-fleet Service, the mechanic records the service date and mileage on
a service sticker under the bonnet of the vehicle. He also records the due mileage
for the first 5,000-mile service. The mileage reading from the service sticker will be
the information recorded on the Check-in Slip under Service due. It is the
responsibility of the lot person to watch these readings to inform the counter
personnel when the next service is due.
The counter personnel should always check the Service Due mileage when they
rent a vehicle out for a long period of time or on a long trip. It may be necessary to
have the Service done before the vehicle is rented out. There is no excuse for
missing a Service as there is more than one check point:
Lot person - service sticker and check-in slip
Mechanic - service sticker under bonnet
Counter staff - check in slip and computer warning.
The lot person signs the bottom of the check-in slip when he has finished this
procedure. It is very important to follow this procedure. One day it may be needed
in court as supporting evidence to show who is responsible for damage. It is
therefore a legal document.
All vehicles in Great Britain and Northern Ireland must be tested when they are
three years old. Thus, if a vehicle was registered on 1st October, 2006 it will be due
for its first M.O.T. on 1st October, 2009. This due date must be recorded on the first
check-in slip and brought forward on all subsequent ones. Once again it is the
responsibility of the lot person to monitor these readings. All minibuses need an
MOT every year even if only one year old.
FLOW OF CHECK-IN SLIP
When the Rental vehicle goes Out
1) Lot person prepares vehicle for rental - vehicle parked and check-in slip
placed up on keyboard with keys.
2) Customer is shown the check-in slip, checks vehicle out physically and signs
the slip. He is shown around the vehicle by the lot person who also points
out the mileage, Emergency Breakdown Cover, spare and jack. It is stapled
to the back of customer's Rental Agreement while the vehicle is on rent.
When the Rental vehicle returns and is checked In
3) Customer returns - Rental Agreement is pulled from file, check-in slip
removed and given to a lot person to check for damage.
4) Lot person inspects vehicle before moving it against the original slip. He
records the new mileage reading, any differences in the fuel level, any dam-
age and returns it to counter.
5) If no new damage is recorded and the tank is full, the counter person
computes the customer's Rental Agreement and gives the invoice to the
customer. If there is damage the lot person must inform the counter person
who will negotiate with the renter regarding the cost and complete any claim
forms as necessary.
6) The old check-in slip is stapled to the back of the Rental Agreement and a
new check-in slip is placed on the "Clean up" section of the keyboard.
7) Lot person completes the new check-in slip on the vehicle, whilst cleaning the
vehicle, and places it on the keyboard with the keys ready for the next rental.
If the vehicle needs to be shopped
If the vehicle is to be shopped, then step 7 is postponed. The check-in slip
would be placed on the "Shop" section of the keyboard (instead of "Clean-up"
8) The counter person/owner makes an entry on the shop list explaining the
mechanical problem. The vehicle is parked in the area for shop cars.
9) The mechanic completes the required repairs and parks the car in the clean
up area for the lot person and moves the check-in slip from the "shop"
section to the "clean up" section.
It is extremely important that the check-in slips do not leave the rental counter
area. The counter person must know where the vehicles are at all times and
the only method of controlling this is with the check-in slips. If for some
reason a check-in slip is misplaced, DO NOT just make out a duplicate one.
First check out the exact state of the vehicle. It may have been shopped for
a major problem and someone has rented it out by mistake.
PLANNING FLEET TURNOVER
Planning Fleet Turnover starts even before you open your location. When you are
purchasing your rental vehicles you must purchase with an eye for re-sale. When
you appraise a vehicle you are trying to determine what the retail price will be and
equally important what local demand for the vehicle is and therefore how fast it
could be retailed.
Try to predict the potential life of each vehicle on the rental fleet. The Margin should
tell you approximately the life of the vehicle.
NINE MONTH TURNOVER PLAN
It is a proven fact that the quicker the vehicles are turned over the better the profit
a) A vehicle on fleet six to eight months:
- brings in good revenue
- low maintenance costs
- profit on retail disposal
b) A vehicle on fleet ten to eighteen months:
- revenue drops drastically
- maintenance cost high
- substantial losses on disposal
The object is to schedule each rental vehicle for disposal after six months on fleet
and also to monitor all vehicles as to abnormal depreciation due to other factors.
A vehicle is purchased at a trade price of £6,500 with a current retail value of £7,250
therefore offering the opportunity of a maximum gross profit of £750 if sold
immediately. Assuming a depreciation factor of £50 per month the effect on margin
is as follows:
Retail Value Trade Value Max Gross Probable loss
Profit if Traded
On fleet 6 6,950 6,200 450 300
On fleet 12 6.650 6,900 150 600
Retail sales incur costs for preparation, warranty provision and advertising and all
gross margins are subject to VAT. It is therefore probable that a break-even
situation would be achieved in this instance on disposal after nine months. Thereaf-
ter the larger the vehicle remains on fleet the larger the losses are on disposal. The
margin you have in a particular vehicle helps to determine the length of time it is
kept on the rental fleet.
In some cases, it is almost impossible to sell either retail or trade without spending a
great deal of money in re-conditioning and you do not know if the costs will be
re-captured in the sale. These vehicles cannot be rented out again because of the
high maintenance cost simply because they are too old. They are on the books at
£6,000 and when they are finally disposed of they will show an enormous loss and
turn your business from profit to loss.
If you do not start your fleet turnover in month one of your business, the problem is
merely postponed and increases. In eight months time, you will end up with every
vehicle in need of disposal to avoid depreciation and an upsurge in maintenance
costs. But the task of selling and replacing and entire fleet in one month is simply
logistically impossible. That is why your cash flow plan will assume at least one
vehicle sold in month one. Fleet turnover discipline must begin immediately.
PREDICT THE DATE OFF FLEET
When the vehicle is entered onto Revolution you get a prompt to enter the date due
off the fleet which should be approximately six months from the time that it goes on
rental. The only exception would be if a vehicle is due to be sold in December,
January or February as those are dead months in the rental business.
Vans have a planned life of twelve months on fleet for two reasons:
1. Vans of all sizes are harder to find in good condition. Supply therefore
prevents fast turnover.
2. The market permits a van to be of slightly less smart appearance than a car.
The market will tolerate its greater deterioration in appearance brought about
by its long period on the fleet.
The average life of a car on fleet should be 4-6 months. The average life of a
van is 12 months on fleet. The aggregate therefore is about 9 months.
REGULAR MEETINGS ARE ESSENTIAL
At the beginning of every month have a fleet meeting. The owner, the counter
personnel, the fleet manager and the mechanic should all attend. You should pull
10% of vehicles from the fleet and the meeting will decide which they are to be.
PRE – SALE APPRAISAL
The object of the pre-sale appraisal is to determine:
a) reconditioning needed
b) cost of reconditioning
c) avenue of sale (retail or trade)
Appraising cars for resale is slightly different than appraising cars for daily rental.
The reason is that you are more concerned with the cosmetic appearance. When a
car is to be sold retail make sure it is sound and roadworthy. This will not only make
the sale easier but will help you build a reputation as a good company from which to
buy used cars. When appraising check:
b) body and paint condition
c) interior (carpets, seats, etc)
d) safety features (brakes, tyres, front end, etc)
e) overall appearance, will it require new or different wheel covers or extra trim
such as side moulding, pin striping etc?
Every vehicle should be professionally valeted before being offered for sale (retail or
COST OF RECONDITIONING
The key of reconditioning is to enhance the value of a vehicle at a minimum cost.
How much can you afford to spend and still maintain a reasonable asking price.
This does count! Make no mistake about it. When the customer cannot find fault
with the condition of your car, cosmetically or mechanically, he will find it hard to find
fault with the price you are asking.
STEPS FOR RECONDITIONING
When you determine that a vehicle is to be removed from the rental fleet and sold, it
is imperative that it be reconditioned immediately. Reconditioning should be
completed in two days. (Maximum one week, where body and paintwork are re-
quired). A decision should be made immediately on what reconditioning will be
The factors to consider are:
a) Current inventory value
b) Can the unit be disposed of quickly at a profit or break-even in its present
c) If reconditioned, will it sell faster and/or create more profit?
As a rule, if you completely recondition a car (body, paint, tyres and clean-up) it will
sell faster for substantially more than a non-reconditioned car. If you fix it up it will
tend to sell itself. Body and paint are usually the most expensive aspects of used
car reconditioning. Be sure to vet competitive pricing. We have found that prices on
a given job can vary by 50%. Watch for new body shops in your area that will be
anxious for new business and will likely be cheaper than the established shops.
Once the body and paintwork have been done, special attention should be paid to
other areas of the car:
a) Replace cracked windscreens. Used windscreens are usually
available at a much lower cost
b) Repair tears in upholstery. Seams can be stitched and ripped
panels replaced without re-upholstering the complete seats.
There are a number of factors that could influence your decision on
whether to retail or trade a vehicle:
- Time and cost of re-conditioning necessary to make the vehicle retailable
- Age and overall condition of the vehicle. Do not recondition junk.
We are not in the restoration business
- Cash flow position. Although you realise maximum value when
you retail a car, you can expect on average to have the money tied
up for 45 days. If you have to replenish your rental fleet or need
cash in the bank to reduce your overdraft, you must trade.
- Time of year. December and January are traditionally slow periods
for used car sales. If you pull a car off in early December, it might
take 90 days to retail.
- If the vehicle has not sold retail after 30 days, take a serious look at
your asking price or vehicle condition. Is the asking price too high?
Is there a flaw in the vehicle which turns off potential buyers?
A vehicle still in stock at 60 days should be traded as the money that is
tied up could be more profitably used on another vehicle or sitting in your
SUMMARY OF TURNOVER PROCESS
1) Purchase vehicle
2) Enter all vehicle information and date due to come off fleet into Fleet
3) Pre-fleet vehicle & prepare it for rental.
4) Have a monthly fleet meeting to review which vehicles need to be
removed From the rental fleet.
5) Enter these vehicles on the Fleet Sales List each month
6) Pull vehicles off the rental fleet and recondition for sale
7) Advertise sales vehicles.
Allocating your Advertising Fund
- Set advertising budget allowing approximately £30 per vehicle per month
for each vehicle you have on sale.
- Choose medium - radio or newspaper. Radio is generally used for image
reinforcement such as "Practical Car & Van Rental sells good cars "whereas
newspaper advertisements sell specific vehicles.
- Identify where your customers are coming from in order to establish which
advertising medium is the most cost effective.
How to Prepare Advertisements
- Do not try to sell the car in the advertisement but try and encourage the
customer to call you for more information, i.e.
i) 2004 Vectra 1.6 L, blue, radio cassette, tyres, excellent condition,
35,000 miles. Nice family car £6,500. Call Debbie on 771 4524.
In the first advertisement you are telling the buyer everything about the
car therefore giving the buyer no reason to call.
ii) 2004 Vectra 1.6 L, perfect condition. For more information.
call Debbie on 771 4524.
- The second advertisement is less specific about options, mileage and price but
makes the car sound attractive enough to create interest. When advertising a
car, if possible highlight the strong points in capitals.
Strong points would include low miles, options, price or anything that is a
good selling point.
SELLING A VEHICLE ON THE TELEPHONE
- Sell the customer on coming in.
- Control the conversation by overcoming objections, e.g.
Customer: "I do not want a 2 litre because of high petrol consumption".
Response: "A 2 litre Mondeo uses a little more petrol than a Focus but
is far more comfortable to drive and is less expensive to maintain".
Customer: "60,000 miles is too many, the car is almost worn out".
Response: "60,000 is low for a five year old car".
- Do not tell him too much. Do not get pinned down.
- Avoid describing the car in detail on the telephone or the customer will have
no reason to visit your location. When asked about our best price trade-in
value of his car, be vague, e.g.
Customer: "How much would you sell the car for if I paid cash?"
Response: "I'm not exactly sure what my cost is but I will work something out for
you after you have driven the car.
Customer: "How much is my 1979 Marina 1.3 worth on trade?"
Response: "It is very difficult to appraise a used car over the telephone. I would
like to drive it to give you an accurate price".
SELLING A VEHICLE FACE TO FACE
a) Meeting and greeting
MEETING AND GREETING:
- Introduce yourself "Good morning. My name is David Lloyd." Extend your
arm for a handshake.
- Get the customer's name.
Usually when you introduce yourself and offer your hand, a person will
automatically answer with his or her name. If not, simply ask him, "and your
Once you have obtained the customer's name, use it frequently in the
conversation. Nothing puts someone more at ease than the sound of their
- Establish rapport and put him at ease.
If someone is going to spend money at your location, they must feel
comfortable. This is best accomplished by giving the customer the
impression that you are going to help him buy a car rather than sell him one.
- start early. Ask questions before he feels trapped.
- ask either/or questions: "Are you looking for a big car or small car?
A saloon or a hatchback?"
- find out how much he can afford to spend.
- use your questions to narrow down the field and funnel him into a particular
- tell the customer he cannot really get an accurate idea of whether the
car is for him until he drives it.
- the customer always has a ready made excuse until he drives the car.
- tell the customer that you will take the car for the first part of the test drive
so that you can go over the controls with him.
- stop and ask him if he would like to drive the car back to your location.
- let the customer drive the car long enough to become interested but
remember the old proverb, "the longer he is in the car, the more time he
has to find things wrong with it".
- never let the customer out in the vehicle without you.
- demonstration builds desire.
- ask the customer. "If I could make you a deal you like on the car would you
buy it today?" eliminate objections.
Objection: "I like the car but I am not sure if I can afford the payments."
Response "Our Finance Company is quite flexible, I am sure we can work out a
payment that is comfortable."
Objection: "the car is a bit too small for my purpose."
Response: "Yes it is small but if you buy something bigger you will give up fuel
economy which you already mentioned was important to you".
Objection: "I am worried that the car might break down tomorrow and cost me
a fortune to repair."
Response: "If you are worried about that we can have car checked by a
mechanic, also we guarantee all our cars." Approved:
- sell the customer on the idea of putting in an offer, don't try to sell him
on buying the car at this point.
- as soon as you get agreement on this point, take the customer to an office
and sit him down.
Never discuss prices in the yard - Bring the customer into your office.
When transforming the rental customer into a buyer, use the same system, i.e.
Customer: "How much are you asking for the car I'm driving?
Response: "I'm not exactly sure but if the price is right would you buy it?"
Customer: "Maybe I've been looking for a used car."
Response: "Come and sit in my office, I'll get the file on the car and see what
we can work out."
- ask the customer, "What kind of deal would it take for you to buy the car?"
- haggle with him, make him think he is grinding out a good deal.
- ask him to approve the offer.
- avoid confrontation.
- be persistent and very, very patient.
- be graphic, always have a pad of paper.
- get a substantial deposit, the bigger the better.
Always ask for 10% or a minimum of £200.
- deliver the car as soon as physically possible.
- make sure it is ready to go and looks its best when the customer comes to
pick it up - first impressions are important.
- tell him you would like him to send his friends to you use the sale to obtain
- set aside an area for sales.
- selling a car consists of setting up a series of control situations, winning the
skirmishes and leading the customer down a logical path to buying a car.
- controlled situations are planned, avoid confrontations, they are unplanned
- don't assume the customer is telling you the truth about what he wants.
PROSPECTING FOR CUSTOMERS
Your strongest prospect is your rental customer. Find out if they are in the market
for a car, qualify and follow up. Ask your customers if they know anybody who is in
the market for a car.
- pay £25 for each referral that sells you a car. (How much does it cost
you per customer in newspaper advertising?)
- make sure that everybody that rents or buys a car knows about this referral
- don't let your counter personnel have price lists.
RELIABLE VEHICLES AT SENSIBLE PRICES
An opportunity to own one of the carefully
maintained vehicles from our fleet at a bargain
Each and every vehicle has been subject to a
programme of regular checks and valeting in
addition to normal service schedules to ensure
it is always in perfect working order.
Remember our future business depends on the
reliability of our vehicles. Now you can benefit
from our efforts.
2005 (L) Ford Focus £****,00
NON-MAINTENANCE MASTER HIRE AGREEMENT
Before you begin to order leased vehicles you will be asked to agree to and sign the following Terms and Conditions.
The clauses pertinent to return standards are in bold text. Broadly speaking these will be as per BVRLA recommendations.
WHEREBY IT IS AGREED as follows:-
1. The Schedule referred to in this agreement means any schedule from time to time agreed between the parties and
expressed to be incorporated into and subject to the terms and conditions of the Master Hire Agreement.
2. The Lessor shall let and the Hirer shall take on hire all vehicles described in the schedule hereto (“the Vehicle”).
3. The term of hire shall be for the period set out in the schedule hereto (“the Schedule”).
4. The rent for the hire of the Vehicle shall be as set out in the Schedule.
5. The Hirer shall pay to the Lessor on the execution of this agreement and before delivery of the vehicle the Rent set out
in the Schedule and thereafter will punctually pay to the Lessor the Monthly Rent set in the schedule. The first
payment being due as set out in the schedule.
6. The Hirer shall pay to the Lessor the sum set out in the Schedule for each mile or kilometer (“distance”) the Vehicle
shall have exceeded the total distance set out in the Schedule.
7. This agreement shall be subject to the clauses and conditions set out in this agreement which the Hirer confirms he
has read and understood.
8. This agreement will commence upon delivery of the Vehicle as described in the Schedule.
9. The Agreement comprising the Master Hire Agreement and the Schedule (“the Agreement”) becomes effective as
regards the vehicle referred to in the Schedule upon signature of the Schedule by both parties and shall continue until
terminated as specified below or otherwise at the end of the term of contract specified in the Schedule. The term of
contract commences upon the date the Vehicle is delivered to the Hirer. Should the Lessor permit the Vehicle to
remain with the Hirer following the period set out in the Schedule then the Agreement shall be extended for an agreed
10. The Hirers acceptance of delivery of the Vehicle constitutes an acknowledgment that the Vehicle complies with his
specification requirements. All alterations additions replacements or renewals become the property of the Lessor.
11. No right of the Lessor under this Agreement shall be waived except in writing signed by a duly authorized
representative of the Lessor.
12. The Hirer during the continuance of the hiring will not sell or offer for sale assign mortgage or pledge the Vehicle or
any part or parts thereof or hold himself out as owner of the Vehicle.
13. Without limiting or affecting in any way his liabilities under this Agreement the Hirer shall at all times whilst the
Agreement remains in force keep the Vehicle effectively insured against loss, destruction, theft or damage to the full
value thereof under an unrestricted comprehensive policy with such company as the Lessor may approve and shall
declare the Lessor’s interest and cause the same to be noted on the said Policy. The Lessor reserves the right to hold
such Policy and insurers receipt in their custody whilst this Agreement remains in force. In the event of any
accidental damage to the Vehicle whether the fault of the Hirer or not, the Hirer shall within 48 hours submit or cause
to be submitted a completed accident form to the Insurance Company currently insuring the Vehicle and notify the
Lessor of the circumstances of any such accident. Upon the expiration or termination of the hiring or the loss or de
struction of or damage to the Vehicle all benefits of and in the said Insurance shall belong to the Lessor if he does so
require and the Insurers may accept his receipt in discharge.
14. The Hirer shall indemnify the Lessor against any loss or damage or claims whatsoever including any third party claims
that may be made against the Lessor.
15. Except where the same shall result from the negligence of the Lessor, its servants or agents the Lessor shall not be
responsible for any damage, loss, costs, expenses or charges caused or incurred by delay or otherwise howsoever
connected with or arising out of or incidental to any breakdown or failure nor for any damage whatsoever caused to
the person or property of the Hirer or of a third party as a result of the use of the Vehicle by the Hirer or any person
authorized by him with the consent of the Lessor.
16. The Hirer shall be responsible for ensuring that the condition of the Vehicle complies with the current construction and
use regulations and any amendment thereto at all times during the period of the hiring.
17. The Hirer shall indemnify the Lessor against any costs and expenses incurred by the Lessor as a result of
Govern ment legislation requiring the Lessor to pay fines or penalties in respect of parking, driving, or similar offences
which occur whilst the vehicle is being driven by the hirer or his representative or during the period of hire.
18. The Hirer shall indemnify the Lessor against any costs incurred by the Lessor as a result of Government legislation
requiring the fitting of any extras or additions to the Vehicle during the period of hiring.
19. The Hirer shall ensure that the Vehicle is properly maintained and serviced in accordance with the manufacturers
recommendations and at a garage that is authorized by the Lessor, and that such other repairs replacement tyres and
maintenance are carried out as are necessary to keep the Vehicle in good order and running condition. In the event
that correct maintenance intervals are not complied with the Lessor may charge a penalty of not less than £350 or
such additional amount as is necessary to pay the cost of reinstating the Manufacturers Warranty.
20. The Hirer shall be solely responsible for checking that the tyres conform to any legal requirements in force from time to
time and shall inform the Lessor or the garage appointed by the Lessor of any replacement necessary. The Hirer
shall replace all worn tyres with radial ply tyres of a high quality brand or tyres to match the existing tyres as
required by law.
21. (a) In the event of the Vehicle being stolen and not recovered within14 days or being involved in a write off
accident the Hirer shall continue payments of the monthly rental as set out in the schedule until such time as all
insurance monies due are received by the Lessor. For the purpose of this Agreement “write off accident” shall mean
any accident as a result of which the Vehicle is destroyed or damaged to such an extent as to be in the opinion of the
insurers incapable of economic repair.
(b) When the Lessor receives the said insurance monies this contract will be terminated subject to the Lessor’s
rights to recover any outstanding hire or other sums due and the Hirer will enter into a new agreement with the Lessor
on as near the same terms to this Agreement as possible for the balance of the period of hire then unexpired under
22. The Hirer shall use the Vehicle in a proper manner and shall return it on or before the expiration of the period of hire to
the Lessor’s premises in good order and in accordance with the standards set out in Clause 35. If on its return the
Vehicle does not comply with the said standards the Hirer shall within 14 days of the Lessors written request pay to
the Lessor the sum required to restore the Vehicle to the said standards. In default of the Hirer returning the Vehicle
for whatever reason on the expiration of the hiring to the Lessor, then the Lessor may take such steps as he in his
absolute discretion thinks fit to ascertain the whereabouts of the Vehicle and take possession of it. In this event the
Hirer shall not only be responseable to the Lessor for all costs reasonably incurred by the Lessor in relation thereto
but also a sum of money for the use of the Vehicle between termination and repossession calculated as being such
sum as would have been due to the Lessor under this Agreement for the same period of time had the Agreement not
been terminated together with a surcharge of 50% thereon.
23. The Vehicle shall not at any time
(a) be occupied by a greater number of persons than it is
constructed to accommodate.
(b) be driven or used by any person for carrying passengers for
hire or reward.
(c) be driven or used in any manner constituting a breach of any statute, regulation or order
relating to the driving and/or use of motor vehicles.
(d) be driven by any person who is not the holder of a current driving licence applicable to that Vehicle.
(e) be driven or used so as to cause any damage or risk to the public or to passengers in the Vehicle.
(f) be driven without there being in force an unrestricted comprehensive policy of insurance onthe Vehicle.
24. The Hirer shall at all times provide safe and proper parking accommodation for the Vehicle.
25. Unless otherwise specifically stated on this Agreement it shall be the responsibility of the Lessor to ensure that the
Road Fund Tax is kept in force during the currency of this Agreement. In the event of the Vehicle Excise Duty being
increased, or any other Duty Tax or licence being levied upon the Vehicle in respect of the running and use
thereof, during the continuance of an agreement then the Hirer shall pay to the Lessor forthwith upon demand such
sum as will indemnify the Lessor from the cost of such increase. In the event of any such liability being decreased,
then the sum equal to the benefit of such decrease shall be paid by the Lessor to the Hirer at the expiration of an
26. The Hirer shall be responsible for regularly checking oils, water and antifreeze levels of the Vehicle, and for keeping
the Vehicle in a clean and satisfactory condition, fair wear and tear excluded and shall be responsible for topping up
oils, water and antifreeze. If the Vehicle sustains damage due to neglect by the Hirer in ensuring that the Vehicle is
properly serviced and maintained the Hirer shall be responsible to the Lessor for the cost of restoring the Vehicle to a
proper serviceable condition.
27. The Hirer will grant to the Lessor any reasonable facilities for the Lessor to inspect the Vehicle from time to time if
desired so as to ascertain its general condition and efficiency.
28. The Hirer must not take or cause the Vehicle to be taken out of Great Britain without the previous consent in writing of
29. In the event of the Lessor giving written permission for the Vehicle to be taken out of Great Britain, conveyance of a
damaged Vehicle back to Great Britain shall be at the expense of the Hirer.
30. In any of the following events namely:
(a) If default shall be made by the Hirer in the payment of the said rent for seven days after the same
shall have become due (whether payment thereof shall have been formally demanded or not) or
(b) If the Hirer shall not perform or observe all or any of the terms and conditions of the Agreement on the part of
the Hirer to be performed or observed or
(c) If any distress for rent rates or taxes shall be levied or threatened to be levied on the goods of or
against the Hirer or
(d) If any process or execution upon any judgement debts shall be issued or threatened to be issued
against the Hirer or
(e) If the Hirer being a company shall enter into liquidation, whether compulsory or voluntary not being a voluntary
liquidation only for the purposes or reconstruction or amalgamation without insolvency or
(f) If the Hirer being a person or where more than one person is the Hirer if any of them shall commit an act of
(g) If a composition or arrangement shall be made by the Hirer with or a meeting shall be called of the creditors of
the Hirer or if a Receiver shall be appointed of the Undertaking of the Hirer or
(h) If the Hirer shall do or cause to be done or permit or suffer any act or thing whereby the Lessor’s rights in the
Vehicle may be prejudiced or put in jeopardy or
(i) If the Hirer is a limited company and there is any change in the ownership of more than 30 per cent of its issued share
capital at anytime or any other material change in its control constitution or policy
(j) If a levy of any distress or execution is made against the Lessor
(k) If an event of insolvency shall occur in relation to the Lessor.
(l) If the franchise agreement between the Hirer and the Owner is terminated
The Lessor may without any previous notice save such notice as may be required by statute determine this hiring
whereupon the Lessor may at any time thereafter retake possession of the Vehicle and may remove the same from
any property where it shall then be kept and for this purpose may enter into or upon such property and seize and carry
away the Vehicle and use all such lawful force as shall be necessary to effect this object and the determination
of the hiring under this Clause shall not affect the right of the Lessor to recover from the Hirer any monies due to the
Lessor under this Agreement or damages for breach thereof.
31. In the event of the Lessor retaking possession of the Vehicle under this Agreement the Lessor shall be entitled to a l
ien on all or any of the Hirer’s goods in or on the Vehicle at the time of repossession until repayment by the Hirer of all
sums due under this Agreement howsoever arising or for breach thereof.
32. The Hirer is not and shall in no event be deemed the agent, partner, servant or employee of the Lessor.
33. Any time or other indulgence granted by the Lessor shall not affect the strict rights of the Lessor under this Agreement.
34. The Hirer undertakes not to operate with a defective odometer, or if this is unavoidable to keep a record of unrecorded
mileage for immediate submission to the Lessor. The Hirer undertakes to report promptly any deficiencies or faults
arising during the guarantee period to the Lessors or appropriate local dealer so that the necessary Warranty Claim
may be raised upon the manufacturers.
35. The standards of good order referred to in Clause 22 hereof shall be defined as follows:-
(a) Bodywork should be sound and free from major dents and other disfigurements. Acceptable are minor stone
chips to forward facing surface bonnet, valance, wings and wheel arches and other minor scratches and slight
pressure dents which do not detract from the Vehicle’s overall appearance. Not acceptable are major impact
dents, creases, unsatisfactorily removed livery, excessive stone chips and any scratch which penetrates
through the colour coat.
Any body repair work must be carried out to the high standard acceptable in the absolute discretion of the l
essor. Where the said standard has not been met the hirer shall promptly pay to the lessor
the sum declared by the lessor as necessary to compensate the lessor for the shortfall in the said standard.
(b) Acceptable on bumpers are normal light markings, dents or scuffing. Not acceptable are cracked, torn broken
or severely bent bumpers.
(c) Minor chip marks are acceptable on glass, windows and lamp lenses. Not acceptable are large chips, holed or
(d) Wheels should be free from any damage or flange distortion. All wheel trims to be present and free from
significant scratches or cracks.
(e) Tyres should be sound and having at least 5mm of tread.
(f) Acceptable on numberplates are light cracks affecting rigidity or security of fixing. Not acceptable are heavily
cracked, broken or holed plates.
(g) Acceptable in the interior are scuffing and small stains which will clean out.
Not acceptable are large areas of staining or uncleanable stains, torn seating and cigarette burns.
(h) All vehicles should be returned with equipment to manufacturers’ original new specification with specific regard
to radio/cassette equipment, tools and spare wheel.
(i) Mechanical Condition:-
(i) The Vehicle mechanically sound and in no need for immediate attention. Any oil leaks to be rectified
prior to return. Engine breathing to be within acceptable limits for age.
(ii) Service records should be up to date and be in accordance with the manufacturers requirements.
(iii) Batteries in such condition as to enable the engine to be started when cold.
(iv) A minimum of 6 months MOT test to be valid where applicable.
(v) All statutory lights to be working and without damage.
FOR AND ON BEHALF OF THE HIRER
FOR AND ON BEHALF OF THE LESSOR
PRACTICAL CAR & VAN RENTAL LTD
RETURNING YOUR LEASED VEHICLES
It is vitally important that you prepare all leased vehicles prior to return. You will be
notified of dates, collection times etc well in advance. Always inform the leasing de-
partment if a leased vehicle is not collected – THE ONUS IS ON YOU! YOU WILL
BE CHARGED LATENESS IF THE VEHICLE IS NOT READY.
The following form must be used when informing leasing that a vehicle has not been
collected at the end of the lease.
ATTN: LEASING DEPARTMENT
PRACTICAL CAR & VAN RENTAL
(FAX N0: 0121 771 4225)
THE FOLLOWING HAS NOT BEEN COLLECTED. PLEASE
ARRANGE URGENT COLLECTION
VEHICLE REG NO: ………………………………………
18th April 2006