Securing the best value deals of the day is top of the list for any procurement professional, and given the many different economic variables we have to deal with, that can be very challenging. In the fleet management sector, sourcing and procuring the best possible lease deals is a significant part of the role and perhaps represents where the biggest cost savings can be made. But how does a fleet manager become autonomous and control that when there are so many vehicles out there and so many different leasing companies vying for your business? The answer is multi-bid funding.
Understanding multi-bid funding
Multi-bid funding is an acquisition method used widely in the fleet management sector. It was developed by Total Motion in 1994 and has become a staple tool used by the industry ever since. Multi-bid funding enables a fleet manager to access expertise in finance and leasing, by taking vehicle procurement requirements to a selected panel of leasing companies.
In recent years we have seen a hike in leasing costs and the market has become unpredictable. This means it is dangerous to rely on one leasing company, or even two or three options, because you are unlikely to be receiving the most competitive lease deals. You need to have complete visibility of the market and multi-bid funding allows you to do that.
How does multi-bid funding work?
The multi-bid funding process will work along these basic steps:
- The fleet manager or fleet management services provider will build a panel of vetted leasing companies
- The terms and conditions and the credit facilities of each provider will be established and verified
- When a vehicle requirement appears a leasing quote will be requested from the panel
- You can verify which of the leasing companies on the panel can provide the most competitive quote
- You can approve the quote and order the vehicle
- You can arrange the contracts and delivery of the vehicle
- You can regularly review the leasing companies on the panel and their performance.
What are the benefits of multi-bid funding?
The benefits of multi-bid funding include:
- Reduced fleet costs – you are always receiving the best value lease deals and will feel this benefit with every monthly lease payment
- Improved flexibility and control
- Expertise – you are benefitting from the best knowledge and experience out in the market
- Better service – because the panel is vetted you are always receiving the best quality of service
- No ‘rate creep’ – as we find when renewing insurance with the same provider year-on-year, the cost gradually increases for no apparent reason and there is no reward for loyalty. With multi-bid funding every leasing company on the panel needs to be as competitive as possible in order to secure your business.
- Reduced downtime – you are securing the best vehicles and under the best conditions, so this will increase the efficiency of your fleet and reduce downtime.
- Future proofing – with multi-bid funding you are guaranteeing the lowest cost of funding on every vehicle now and also in the future.
Choosing Total Motion as your fleet management provider
If you choose Total Motion as your fleet management provider you will experience even more benefits when choosing to adopt multi-bid funding. These will include:
- One point of contact – you only have to deal with Total Motion, not a panel of up to 60 leasing companies.
- Reduced admin – Total Motion will deal with the order details and contracts as well as reviewing the leasing companies on the panel.
- Best relationships – Total Motion has over 30 years’ experience in fleet management and has established relationships with all the best leasing companies in the market. These supply relationships mean we already have a panel of suppliers that is trusted, highly competitive and constantly under review.
- Aligned costs – because we have the same established relationships with service and maintenance providers, we can align the cost savings made via multi-bid funding with other savings in service and maintenance, meaning your leasing package is as competitive as possible.
Contact Total Motion today to learn more about multi-bid funding and how it can benefit your fleet management function, and if you want to sign-up with Total Motion as your fleet management provider then you will be making even more savings straight away.
