Disposal and/or replacement of your fleet vehicles can be considered the last phase in the lifecycle of your assets. This phase does not necessarily involve the physical disposal of vehicles, but more often it is when an organisation or a company decides to remove the vehicle from the fleet at the end of its contract, if leased, or it gets remarketed if it has reached the end of its operational life.
Fleets would generally need to create and later deal with a disposal policy that details the process. This is a first step to take if you wish to handle the disposal arrangement according to the appropriate timeframe; chances are that not only will you need to handle the disposal of your assets, but also with their replacement; and this needs to be done in a timely fashion to ensure work continues to be carried out and operational activity is not experiencing unwanted pauses or downtime that can impact costs. What might also happen is, if fleets do not plan appropriately for the disposal and replacement of vehicles, they feel forced to renew leasing contracts even though the company might not have anticipated renewal but are, however, reacting to time constraints. And this is what often affects the bottom line and, therefore, the decisions of a fleet manager.
When considering the strict disposal or replacement, then, the company has to pay not only for the operational costs, but also for storage and for keeping it in operational use (so it has to be kept maintained and safe). Fleet managers have to make sure roadworthiness is maintained to maximise the value and condition of the vehicle, which in some cases even has to be certified by a third party specialising in this type of service (especially in the case of vehicles that are property of the fleet, but not for the leasing ones, that have in any case specific rules for their delivery to the leasing company once the contract is over). The idea is to maximise the use of the vehicle while at the same time keeping it in good condition, planning for its resale/remarketing and selling the vehicle at the highest price in order to invest the income into more vehicles or to fund the fleet operation.
If the organisation is also the owner of the vehicle (not leased, in other words), there are different disposal methods that can be approached. These methods can range from selling to neighbouring organisations or auctioning to breaking the asset for spare parts/equipment for selling on or for use in other fleet vehicles. Auctions are favoured by several organisations, and this method provides an opportunity to gain a fair price and save time on advertising, storing vehicles, hosting open days and managing bids.
As disposal/replacement are a necessary part of the lifecycle of a vehicle, it is crucial for the purpose of running a smooth disposal process that all important information of a vehicle is recorded and included in the asset register, fleet database, including maintenance records and fuel details. This is just another aspect in which your fleet management software can help: if the data and the condition of the vehicle suggest the disposal is anticipated, you might even consider retaining the vehicle, the lease, extending its life or repurposing it and using it for less demanding activities.
