Fleet and Commercial Sales | What Every Business Owner Should Know

By Jordan Noller, CMO of Noller Auto Group & Mark Hobart, Commercial Fleet Manager of Noller Ford of Topeka

What Constitutes a Fleet or Commercial Customer?

When the public thinks of fleet or commercial vehicles, they often imagine a large business with 20 or more trucks and vehicles. However, businesses of any size can qualify as commercial operators. Any vehicle used by or titled in the name of a business, whether it is one vehicle or a thousand, may be considered a commercial vehicle. That means businesses of all sizes may be eligible for commercial and fleet programs offered by major vehicle manufacturers.

The steps to establish an official business and qualify for a fleet account are straightforward, although they may vary depending on the manufacturer. You should have an established business name, an Employer Identification Number (EIN) and a dedicated business bank account.

Why Commercial? What Are The Benefits?

As the owner or operator of a business, tackling the never-ending to-do list each day can seem like a challenge, especially when that list involves managing your finances. While your fleet may not be the primary source of your company’s revenue, neglecting it or not having a reliable fleet program in place could cost you unnecessary time and money. This is where a good relationship with a commercial manager becomes valuable.

Many commercial and fleet customers begin exploring business vehicle purchases for tax purposes. The tax benefits, particularly for LLCs, can be significant. In some cases, businesses may be able to deduct up to 100% of a vehicle’s cost, but eligibility depends on how the vehicle is used and applicable tax rules.

This can be a major benefit for smaller startup companies that may not realize this option is available. Contracting, transportation, landscaping and plumbing are just a few examples of the many types of businesses that may qualify. Many of these businesses operate only one to three vehicles and are still considered fleet customers.

Other financial benefits may include access to business financing, which can help separate personal and business finances while protecting the owner’s personal credit and creating a protective “bubble” between the two. Business financing can also help establish the company’s credit history and provide more flexible payment options and repayment schedules.

Consider a commercial line of credit, which can be established for almost any qualifying business. One of the biggest advantages is that there is typically no cost to set it up. Once established, it is available whenever your business needs another vehicle. Rather than completing a new credit application each time, you generally only need to renew the line of credit once a year, saving valuable time.

Many business owners also overlook the option of leasing instead of buying. A Commercial Lease, or TRAC, is not a typical consumer lease. Although TRAC is a Ford Pro Credit term, most manufacturers offer a similar program.

This customizable, open-ended lease offers flexible terms and residual values based on the needs of the business. It can accommodate new and used vehicles, modifications and upfits, as well as high-mileage and heavy-use applications.

For businesses looking to lower monthly payments compared with traditional installment financing, leasing can be an attractive option. It can also help keep more cash flow within the business, and there is generally no early termination penalty. Depending on the manufacturer, mileage restrictions may be minimal, and allowances for vehicle wear and damage may be more flexible.

At the end of the lease term, you generally have three options: return the vehicle and receive any available equity, trade it toward another vehicle with any equity applied to the new purchase, or purchase the vehicle and keep it.

What some people forget are the additional perks that often come with commercial accounts. These may include discounted pricing, priority fleet service and repairs, a dedicated finance advisor and a dedicated commercial account manager.

Customers purchasing from a Ford dealership may also have access to complimentary Mobile Service, with a service van traveling to the customer’s location at no additional charge. “Ford Pricing” may depend on fleet size, but you should always receive the best available street pricing along with additional fleet discounts.

For example, Ford Pro, the commercial division of Ford Motor Company, assigns qualifying businesses a Fleet Identification Number (FIN), which establishes company-specific discounts that vary by vehicle line. These discounts often apply even when there are no retail rebates available and typically remain in effect throughout the model year. Additional finance, warranty and maintenance discounts may also be available.

Priority Service and Maintenance

As the saying goes, time is money. An active business cannot afford to have its vehicles down for an extended period of time. Working with an established commercial account manager and service department should provide access to a dedicated service advisor and priority scheduling. Fleet rentals and, in some cases, loaner vehicles should also be available. Depending on your warranty or maintenance plan, rental vehicles may be provided. Fleet discounts may also apply to parts and labor. If not, it may be time to find a different shop.

Plan Before You Buy

Use your community, word of mouth and online resources to do your research. Shop around and develop a good understanding of what you want. Compare new and used vehicles, explore available packages and consider whether purchasing or leasing makes the most sense for your business.

As a business owner, remember you can also expect more from your dealership. The best commercial account managers understand that business owners need to get back on the road quickly and can accommodate remote sales.

Give yourself time to compare your options and find a commercial dealership with knowledgeable staff who understand fleet vehicles, trucks, vans, towing capabilities and commercial upfits. While there is much more to consider, one piece of advice stands above the rest:

Work with an experienced and knowledgeable commercial account manager.