TUESDAY, NOVEMBER 03 RD, 2015
Can I afford to buy new or should I just keep the old kit going and risk a potentially large repair bill? This is a question that owner and fleet managers inevitably have to ask themselves.
Kevin Parkes, Director of Equipment Solutions at Finning believes the answer lies in managing the risk.
“When it comes to investing in your fleet there will always be the dilemma of continuing to run with existing equipment or making new purchases. In difficult recent times the former has been the popular choice, bringing with it the greater need for servicing and maintenance.
“’We service what we sell’ is a long standing Finning mantra that has seen us invest in preventative maintenance services such as Finsight and give productive second and third lives to large equipment through rebuilds.
“This holistic approach combined with the accumulated knowledge and data of equipment and applications has put us in a position where we are able to manage greater levels of risk when supporting key items of new equipment.
“With many businesses restricted on capex and still operating on low margins, when it comes to investing in products like medium to large wheel loaders, ATs and excavators, customers have a real balancing act on their hands. So to make money when using this equipment you have to improve performance and cut costs. The benefits of new equipment are clear, higher uptime, lower fuel costs and increased productivity. But what about capital cost?”
Learning from the car industry
New cars sales have been on the rise for quite some time now, and the reason is the introduction of package deals that combine the likes of warranty, servicing and insurance into a monthly fixed cost. By taking away the risk and hassle for the customer, a new car instantly becomes a more attractive proposition
This is the premise of our ‘Just Add Diesel’ offer in partnership with Cat Finance. It is based on a fixed monthly payment and a guaranteed uptime of 98%, meaning we are effectively taking on the risk for the customer.
Included is a five-year/10,000-hour extended warranty, combined with a five-year preventative maintenance package and a subscription to monitoring service Finsight. So all a customer has to do is Just Add Diesel and we do the rest.
It’s a clear step change in the industry and one we are pioneering. It’s not a solution for all, but it enables a customer to take advantage of new equipment, for a fixed monthly cost.
Fixing Concerns
Malcolm Construction runs a quarry in Ayrshire, Scotland and has recently benefited from this type of structured deal, having invested in a 26-tonne Cat 927K wheel loader, and a 31-tonne 980K wheel loader.
Malcolm Construction Managing Director, Walter Malcolm: “When we were looking to upgrade our machines, we wanted an option that would give us low lifecycle costs with high productivity.
“We identified the Cat 972K and Cat 980K as the ideal units for our operation, and the Just Add Diesel solution was a great alternative payment option that made sound business sense, enabling us to plan ahead financially.
“With the fuel savings and productivity we’re essentially running one of the units for free.”
Managing the risk of new equipment through a structured package is almost certainly the best answer the industry currently has to this age-old dilemma. By allowing owners to forecast exact expenditure over a given time frame, combined with fuel savings and increased productivity, new equipment now makes perfect sense both financially and operationally.
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