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Their company started with one six-cylinder full-size service van and five years later, the company was operating a six-vehicle fleet of full-size, six-cylinder vans. It wasn’t until the August 2010 fuel bill arrived that Hubbert and Martinez knew something about their fleet had to change.
Searching for Change
Due to multiple economic and global issues, the price of fuel went up considerably in 2010. “When we received that extremely high refuel bill a few years ago, it was then that we started researching different service vehicles in hopes of finding one that would provide us better fuel economy,” explained Hubbert. “Our vehicles at the time were only averaging approximately 12 miles to the gallon, and we wanted and needed to make a switch.”
In hopes of finding a solution, Hubbert and Martinez decided to contact the company they leased and purchased many of their past vehicles from. The company suggested that they consider investing in the Ford Transit as a replacement to some of their older, gas-guzzling vehicles.
The Transit is described by Ford as ideal for urban driving and features seating for two to five passengers depending on the arrangement of the fully-customizable cargo area.
“Because these vehicles averaged 24 miles to the gallon, and after checking out our finances, we concluded that the fuel savings would cover the costs of the new vehicles,” said Hubbert. “So we decided to start the process of changing out much of our fleet.”
Protecting the Brand
Changing the fleet of vehicles at Champion AC was not something the owners did quickly or without process. There were many things to consider. The first hurdle was working out a deal with the leasing group.
“Our leasing group worked with us to time out our fleet revamp,” explained Martinez. “We put our first two Transits on the road in March of 2011 and ended up selling two of our vans that had the poorest fuel economy.”
Martinez said that selling the vehicles was tough, but that the fuel costs were affecting the company’s profit margins. In selling old fleet vehicles, he suggested that the shrink-wraps, decals, and all branding be removed before releasing the vehicle to its new owner. Some of them are more difficult to remove, but worth the effort in protecting the brand.
After the initial two Transits were put into service, Hubbert and Martinez began seeing a financial improvement in their bottom line.
“With the savings and the sale of two of our old service vehicles, the only upfront expense has been shrink-wrapping our new Transits,” said Hubbert. “The $1,500 per van for shrink-wrap was well worth it for the fuel savings.”
Enjoying the Upgrades
Champion AC currently has four of the new service vehicles on the road and plans to add another vehicle in March 2013 and one in April 2013. Although Hubert noted that he doesn’t miss anything about his old vehicles, he did point out that it was important to maintain a few larger vehicles to go along with the smaller Transits.
“We still use some of our older vans in our installation department,” he explained. “Transit vans don’t have the space to carry entire units, so they can’t be used as install vans.”
Not only has this change been beneficial to the company’s bottom line, but it has also offered the technicians more features and conveniences. According to Hubbert, the techs now have access to Bluetooth, navigation systems, and organized storage systems.
“Our techs also enjoy spending less time at the pump,” he said. “This allows them to spend more time providing timely service to our clients.”
Improving the Bottom Line
Overall, Champion AC is happy with its decision to make adjustments to their fleet. Martinez reported that the vehicles not only look professional but that they are saving the company a lot on its fuel expense. At last look, he estimated that they are paying out less in total cost for their current fleet than they were for their older fleet.
Hubbert suggests that any contractor looking to improve the bottom line through fleet changeover should do it in stages.
“Start with one or two and let the fuel savings cover the cost of the monthly payment,” he explained. “Then progress forward as your budget allows you to.”
Publication date: 11/5/2012