Managing the Financial Side of Commercial Fleets

Fleet Manager: 'Car Person' or Asset Manager?

Has the basic job of the fleet manager changed? Not really. However, the perception of what a fleet manager is certainly has evolved.

November 2012, by Staff

A veteran fleet manager shared his experience from his early years on the job, attending his company’s annual sales meeting.

During breaks from the official activities, he had the opportunity to meet with several field sales staff with whom he had extensive telephone conversations, and put a face to the voice. One young sales rep, upon seeing him, remarked, “You’re not at all what I pictured.” Amused, the fleet manager asked what the rep was expecting. The rep replied by asking the fleet manager not to take it in the wrong way, but he expected a mechanic sort, a “car guy,” picturing him wearing a blue work shirt with his name stitched over the pocket.

This anecdote provides, in a nutshell, what the fleet manager’s image was 25 years ago: a “car person” who, on weekends, might have worked on restoring a vintage Packard in his driveway, and whose background included turning wrenches in a repair shop or selling cars on the dealership showroom floor. It wasn’t far from the truth, either. But, what about today? Does the image match the reality?

How the Job Has Evolved
No one really knows exactly when the job of fleet manager came about. Companies have provided vehicles to employees practically since the first Model A rolled off the Ford assembly line, and someone in the company had responsibility for them in some capacity. Indeed, the military has had motor pool jobs, from drivers to mechanics to procurement, for decades. In the early years of the profession, when the job finally was defined and the title first used, the company naturally looked for someone in the company with an automotive background, who knew vehicles and the processes involved in acquiring, maintaining, and selling them.

Automotive backgrounds varied; some worked at dealerships, others repaired them in shops, still others came from the military, and the motor pool. One way or another, though, they were indeed “car people,” as management didn’t know where else to find someone to manage cars.

As time went on, the broad-based skills and experience that the profession required became more evident, and fleet managers began to come from more varied backgrounds (e.g., accounting, finance, purchasing). The so-called “car person” began to evolve — or, more accurately, the perception of the job — into an asset manager.

What is the Job?
Before even addressing the question, it makes sense to define the role of the fleet manager. Much has been said and written about how the job of a fleet manager has changed. It’s different, more complex, and more data-heavy than it was 20 or 30 years ago. In short, this is nonsense.

Yes, vehicles of all types are far more technologically advanced than those of the 1980s or early 1990s, but so are the tools fleet managers use to manage them. The basic mission of the fleet manager is no different today than it was 50 years ago: to provide the company with vehicles capable of performing the job in the safest, most cost-efficient manner possible.

There are two different fleet management scenarios: one for fleets that are centrally garaged (i.e., return to a central location each day) and another for fleets that are geographically disbursed.

The operation of fleets throws off a substantial amount of data:
■ Operating costs (e.g., fuel, maintenance and repair, tires, accident costs, etc.).
■ Fixed costs (e.g. insurance, license/title/tax, and depreciation).
■ Miscellaneous costs (tolls, car washes, etc.).

It is this data that fleet managers use to achieve the goals of the profession, such as safety or cost efficiency. The difference between the two scenarios is that managers of centrally garaged fleets see the vehicles, while those of geographically spread fleets generally do not. For those reasons, the latter’s performance is completely dependent upon the data, while the former can use both the data and their own observations, as well as technical experience.

The Car Person
In the early days of the profession, it was critical for the fleet manager to have vehicle experience, simply due to the lack of access to the outsourcing programs fleet managers have today, programs that provided key car expertise that help fleet managers see and understand the data, and make decisions on expenditures. Fewer fleets were leased, which required fleet managers to know and understand how vehicles were priced, how dealers operated, and how to sell them when they came out of service.

Then, as now, data was important, particularly for managers of geographically dispersed fleets. But, that data was a great deal more difficult to capture. Fleet expenses were first taken from hard-copy expense reports; sometimes gleaned from among travel and entertainment expenses. Mileage, arguably the most critical data element in fleet management, was even more difficult to capture.

Some expense reports had a separate entry for car odometer readings, others did not, while still other companies had a separate process for capturing mileage. The introduction of fleet services, from national accounts to maintenance management to fuel cards, has helped make the data capture more efficient and accurate.

Which helps explain why the earlier fleet manager had to be a car person almost by default. Not having access to detailed, timely, and accurate data required fleet managers to be more intimately involved in nearly all processes. Here are some examples:

National account purchasing came about before maintenance management. Although this allowed fleet drivers to purchase maintenance, repairs, and tires quickly and easily nationwide, from a single source, managing these repairs had to be done as they occurred.

Without certified technicians provided by a fleet service, such as maintenance management, expenditures over a set amount were authorized by the fleet manager. Repair shops called with information, and it required someone with some experience and knowledge of vehicle technology to provide the authorization.

For company-owned fleets, when a vehicle was needed on an emergency basis (new hire, total loss, etc.), it was the fleet manager who had to call dealers local to the driver, find vehicles in dealer stock, negotiate pricing, and complete the sale (including paper flow and payment). Without some experience and/or understanding of how dealers operated, this process could be cumbersome and difficult.

Ultimately, while fleet management has always been the management of company assets, before the introduction and widespread use of fleet services, a fleet manager did need to be a car person. Fleet expenses have been expressed, and managed, via cost/use ratios, since the early days. But, prior to the widespread use of fleet services, fleet managers were more directly involved in what those expenses ended up being. Taking calls from repair shops, negotiating what should be done, purchasing vehicles from stock or negotiating agreements directly with dealers, and ultimately knowing used-vehicle markets and the give and take of selling them when they came out of service.

The Asset Manager
So, the earlier fleet manager, the car person who lacked the technology that would provide the level of accurate and timely data needed to manage the fleet remotely, had to be directly involved in what that data would ultimately do — by authorizing most repairs, purchasing cars directly from dealers, and selling them on the wholesale market. So, when did the asset manager appear?

Of course, there is no specific date; however, it can be said that as the more simple purchasing programs (such as national accounts) evolved into far more advanced services (maintenance management), and as more fleets began to see the financial and administrative benefits of leasing, suppliers began to provide the vehicle-specific expertise that fleet managers had previously needed themselves.

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