What Is Fleet Pricing on New Cars?

Corporations, car rental agencies or utility companies that want to buy a fleet of cars or trucks negotiate with dealers that will give them a special price: fleet pricing. It makes good business sense for car companies to sell each car in a fleet for a much lower price than they would sell one car to an individual. It could take the dealership months to sell the same number of cars that the corporation wants to buy all at one time. If the car dealer sells the fleet, chances are good it will also sell the corporation a contract to service the fleet, which brings in even more income.

Definition

Car manufacturers, dealers and leasing companies have different requirements for whether a company would qualify for fleet pricing. For some, a fleet is five or more cars; for others the magic number is 10. One car manufacturer requires a company to own or lease 15 or more cars and purchase or lease five new ones every year. Once the eligibility requirements are met, special pricing is negotiated for the final purchase price of the fleet, which is always significantly lower than sticker or retail price on the make and model of car or truck.

Benefits

In addition to lower pricing, buying a fleet allows corporations to deal directly with a fleet manager, who has the authority to close deals and arrange financing. Buying a fleet benefits the car dealer as well, because even though the prices are lower, the dealer is making a large sale that brings in more revenue than an individual sale would at a higher price.

Management

If a company has offices all over the country and cars from the fleet will be in various locations, someone in the company has to be responsible for managing the fleet. That would include making certain the cars get serviced when they are supposed to, and keeping records of payments, insurance, maintenance, tires and the company employees that each car is issued to and on what date. Rotating the cars with a dealer so that new ones replace older ones after a certain point must be part of the contract. When an employee is laid off, getting a car back from him must be handled as well.

Considerations

Even with fleet pricing, companies should make certain it is more economical to buy a fleet than it would be to pay IRS-sanctioned mileage rates. Car rental agencies would need to buy a fleet, but companies just purchasing cars for their sales staff or executives should re-examine their records to determine whether that is the best way to spend their money, not forgetting to take into account the time of the person who manages the fleet.

Geography

Cars that are used in Southern climates that are not subjected to harsh winter weather and salted roads should be considered when negotiating fleet pricing. When the cars in the fleet are rotated, these cars should have better trade-in value, which should be allowed for in the fleet pricing contract.