30Formanycompanycardrivers,2012isunlikelytobringcheerintheformofanewvehicle.Short-termdecisionstopostponereplacementprogrammesatthestartoftherecessionhave,inmanycases,becomecompanypolicy,withtheindustrytypicallyextendingvehiclelifefromthreeyears/60,000milestofouryears/80,000miles.Itisnotanexactscienceandthereisamultitudeofvariationsamongfleets,butthegeneralconsensusseemstobethatlongerreplacementperiodsprovidetheefficienciesneededinthecurrenteconomicclimate.Duringtherecession,alargeproportionoffleetsextendedtheirreplacementcyclesbeyondthetraditionalindustrystandardofthreeyearsand60,000milesbecausetherewasastrongfinancialimperativetocutcostsintheshortterm,buytimeinordertoretrenchinthemediumterm,andthenre-examinefleetpoliciesindetailbeforemakingadecisiononhowtomoveforwardsinthelongerterm.However,althoughtheyhavesuccessfullymanagedlongerreplacementcycles,fleetsfaceadelicatebalancingacttocreatearobustpolicy.Longerreplacementcyclesbringbenefitsthroughlowercosts,buttherearealsopotentialrisks,includinghighermaintenancecosts,lowerresidualvalues,greaterlevelsofvehicledamageandunhappydrivers.Fleetssuggestthatgreaterlevelsofreliabilityamongmostfleetcarsmeanmaintenanceshouldn'tbetoomuchofaconcern,aslongasdriverstreatvehiclesproperly.Oneoperatorsaid:"Eachfleetwillbedifferent,butfortheaveragemileageandusepatternsofthevehiclesonourfleetthisiswhatworksbestforus."Forthepremiumbadgevehicleswehave,aslongastheyarelookedafterwell,servicedregularlyandproperlymaintained,theyremainveryreliable,safeandjustasmuchapleasuretodriveaswhentheywerenew."Fleetswrestlewithreplac lower residual values, greater Fleets suggest that greater levels of reliability among most fl eet cars Inachangingeconomicclimate,thesolutionofmanyfleetoperatorshasbeentokeepthefleetflexible.Withinthebroadpolicyframeofsetreplacementcycles,proactivefleetmanagersmakeday-to-daydecisionsonvehicleacquisitionbasedonavarietyoffactors,includingrunningcostreports,theneedsofthebusinessandthevaryingrequirementsofdrivers.This'fluid'fleetpolicyapproachisidealformanagingongoingservicemaintenanceandrepaircostsanditac

31acementcycleequationisn'tjustimportantbecauseofinternalconsiderations,asexternalfactorsarealsohavinganimpact,particularlywhenitcomestoacquiringcars.Fleetsreportthatmanufacturerleadtimesaregettingsolongthattheyneedflexibilitytopostponeorshortenreplacementcyclestorespondtoanyproductionissuesfacingmanufacturers.Butwhilemostfleetsseemsettoretainextendedreplacementcycles,somearelookingtoshiftpolicyback.Twokeyfactorsareinfluencingthisreversal-driverpowerandcostconcerns.Theinfluenceofdriversoverreplacementcyclestendstovaryaccordingtowhichindustrysectorafleetisoperatingin.AccordingtotheFleet200MarketDynamicsReport,adetailedanalysisofBritain'slargestfleetsbySewellsResearch&Insight,drivershavemostinfluenceonfleetpolicyinperk-carheavysectors,suchasbanking,accountancyandIT.Insomecases,HRdepartmentsarestartingtogaintractionfortheearlierreplacementofcarsasatooltoaidtherecruitmentandretentionofkeystaff.Thesecondkeyfactor-costconcerns-relatestoaccessingrunningcostsavingsobtainedbyshiftingtomoreefficienttechnology,acalculationthatmustbebalancedagainsttheadditionalinvestmentrequiredforanewvehicle.Forexample,withrapidlyimprovingengineanddrivetraintechnology,CO2emissionsarebeingdrivendownyear-on-yearandmpgperformanceisgettingbetter.?Cheaperrentals/lowerexpenditureonreplacements.Leasingsavingscanbeworthseveralhundredpoundsayearpercar.?Image-customersmightnotappreciatewhat'sperceivedtobeaprofligateapproachtobuyingnewcarsatatimeofausterity.?RiskofhigherSMRbillsifcarsarenotlookedafter.?Lowerresidualvalues.?De-motivatedstaff.?Slowertoexploitadvancesinsafetytechnology/fuelefficiency.?CostofMOTinfourthyear.?Carmightfalloutofmanufacturerwarrantyinfourthyear.TheprosTheconsExtendingreplacementcycles