Fleet Vehicles: More Liquid than a Marketable Security?

Authored by Shaefer Schuetz.

How quickly can you turn your fleet vehicles into cash?

Depending on relationships with wholesale buyers, capital structure, and administrative sophistication, it could only take a few days. While the concept of a liquid asset is often associated with financial instruments, an unconventional perspective unveils a hidden value within many organizations- their fleet of vehicles. Fleet vehicles, traditionally viewed as a necessary operational expense, can be strategically leveraged as liquid assets.

As fleet managers, directors, executives, etc. this offers a massive benefit to our organizations. The asset class we govern could be used to generate cash in a pinch and save our companies from catastrophe, finance future growth, or just help everyone sleep at night.

Marketable Value:

Much like liquid assets, fleet vehicles possess a certain fluidity in their value. Fleet vehicles can adapt to market demands and technological advancements. Managing asset values, operating costs, and operational efficiency at times can feel like an impossible task.

Having flexibility in your fleet and generating cash in the secondary market at the right time is a massive advantage for any fleet professional. The COVID era has made balancing these tasks exceptionally more difficult.

Collateral:

Communication between the fleet and finance departments within any organization is important. Having an updated fleet equity report and forecast gives your finance team an edge when working to secure additional capital. Their ability to comprehend a historically difficult to understand asset class can give the organization an advantage while simultaneously making the fleet department’s life better.

Black Book’s Value Engine is a great tool to generate market values for existing fleet vehicles and show a true value for the vehicles within an organization.

Rental Partner:

Having a flexible fleet rental partner allows an organization to tap into this asset class and convert vehicles to cash when necessary. To strike when the iron is hot, we often need replacement vehicles to bridge the next batch of purchases. Or, to supplement growth and project-based demand.

A rental partnership is a necessity for any fleet. The need is amplified as we continue to operate within an allocative environment. Renting vehicles gives flexibility to move fast and convert vehicles to cash when it’s needed.

In conclusion, the parallel between fleet vehicles and liquid assets reveals a symbiotic relationship that can significantly impact a company’s financial health and operational efficiency. Businesses that recognize the fluid nature of their fleet and manage it accordingly can gain a strategic advantage in the marketplace.