Starting this week, you may see some new, official Beloit College wheels on campus, updating the college’s fleet of seven passenger vans.
The college’s Business Services Director Jeff Finger spoke to the Terrarium about how a new system for replacing fleet vehicles--leasing instead of buying--also doubles as a cost-saving measure.
Terrarium: Why has the college decided to lease vehicles as they need to be replaced, rather than buying them?
Jeff Finger: There are a number of reasons why leasing makes more sense for the college than buying. When buying vehicles, we would use them until they were no longer useful and then have to come up with a large amount of capital to buy replacements. Due to budget needs, vehicle availability, and other cost issues at the time we needed to replace vans, this often caused us to hold vehicles in the fleet for longer than we would have wanted, often accumulating mileage well into the 130,000-plus mile range. This resulted in less reliability and higher repair costs and left us with vehicles that were not as nice as we would like them to be for our users.
With large commercial fleet vendors now actively coming into the higher education market, we find we can now economically lease vehicles and replace them with less than 100,000 miles, so no one has to drive a high mileage fleet vehicle. On an annual basis, the cost of leasing is less than what we would have to spend to buy new vans and solves the problem and expense of trying to properly maintain an aging fleet. Fleet users will get to use vehicles that are in much nicer shape and the college will no longer have to find the huge capital funds needed to buy new vans.
Terrarium: When will people on campus start to see this change?
JF: The first three vans arrive this week, which will update all the current high mileage vehicles.
Terrarium: Will the college eventually switch over to an entirely leased fleet?
JF: Yes, there is a long-term plan which will eventually result in all the fleet vehicles being leased and turned over on a rotating basis.
Also, these leases, obtained through a commercial leasing firm, are not the same as a regular lease that you may get on your personal car. These are “open ended” leases, which do not incur penalties for exceeding a (often very low) mileage limitation.
This type of lease agreement is perfect for a fleet operation, since you don’t have to watch the mileage on each individual vehicle to insure it does not exceed its limit. That said, each vehicle will be replaced every four years, which should see mileages peak at about 100,000 miles. This plan will result in a much newer fleet at less cost!