With all major companies offering updated fleet allowance programs...competition should prove lively for the 1968 model year.

That there is "gold in them that hills" . . . the fleet business ... is best indicated by the fact that all of the ear manufacturers have set up 1968 fleet allowance plans. Plans which very plainly spell out to the leasing companies and the business fleets that "there is money to be had if you do business with us."

In September 1966, Automo­tive Fleet stated that "stronger competition, unlimited availability and adjusted 'allowances' insure hot battle among car manufacturers for the fall's volume orders."

The same can be said for the 1968 model year, with every auto-mobile manufacturer announcing his particular plan at this time for the commercial leasing and daily rental industry.

When it is considered that about 900,000 new cars will be purchased by the fleet industry during the 1968 model year, it doesn't take too much to figure out how much "gold" there is in "them thar hills."

Industry records again indicate that Chevrolet, Ford and Chrysler (combined divisions) are each shar­ing about a quarter of the total available business. The balance is picked up by all the other makes.

But with General Motors defi­nitely in the fight to improve its po­sition in the ever-growing fleet sales market, it can be expected that the percentage of fleet sales volume previously achieved will increase during the next year.

GM has announced a "fleet fi­nance plan" available to all Chevro­let, Pontiac, Oldsmobile, Buick and GMC Truck & Coach dealers. Only Cadillac is excluded since their fleet volume is limited.

The "fleet finance plan" has been designed to enable the GM dealer to offer competitive financing terms and to place positive limit on their liability in the event of repossession losses.

Why should General Motors in­itiate this assault on the fleet sales market? Simply because CM began to realize that their volume of busi­ness in the marketplace was dimin­ishing. The rival car manufacturers had presented to qualified fleet cus­tomers plans and programs which made it more desirable for some ac­counts to do business with them. It's as simple as all that.

It must be remembered that both Chrysler, Ford and American Mo­tors have invested substantially in increasing acceptance for their new models. How that acceptance was achieved is best indicated by the continuance of the allowance pro­grams set by these companies. Now all car companies are in the forefront at the start of the 1968 model year with plans which should insure a competitive battle to at­tract a fair segment of the fleet sales market.

The 1967 Fleet Allowances

For 1967, General Motors made a payment of $50 directly to its au­thorized dealers for each Chevrolet, Pontiac, Oldsmobile and Buick sold to fleet users. The specialty cars such as Chevrolet's Camaro, the Oldsmobile, Toronado and the Buick Riviera were not covered.

Ford offered two fleet plans. The first provided a $50 allowance on each Ford, Fairlane and Falcon purchased by fleet and leasing cus­tomers. Payment was made directly to the Heel after submission of a claim form. The second Ford plan was a guaranteed depreciation program. During the 1967 model year, participating companies were to be reimbursed any difference between the Automotive Market Report "clean" minus $100 value and the actual resale price if the resale price was lower.

Under the 1967 Chrysler pro­gram, the fleet received no rebate until it purchased that number of Chrysler ears that exceeded the combined total of new registrations for the fleet in the 1964-1965 model year. From 7.5 percent to 15 percent more cars, the fleet received a re­bate of $75, .$150 or $175 per car, depending upon the model in­volved. After 15 percent, an addi­tional $50 per ear is provided.

American Motors and. Checker al­so offered, allowance programs.

What is being offered at this time of the year-the 1968 model year- to the leasing companies and busi­ness fleets. Let's take each major fleet finance plant apart - some of these plans require a Philadelphia lawyer to figure out.

According N. F. Roleson, man­ager, government and fleet sales, American Motors "will continue to offer an extremely competitive fleet allowance program, covering cars placed in service by leasing com­panies and business fleets."

For 1968 models, American Mo­tors offers a choice of two plans covering cars purchased by leasing companies to be leased to other clients.

Plan I - 1968 Model Fleet Allow­ances:

 

Series

Minimum

Maximum

American

...

$ 50

Javelin

...

50

Rebel

$100

200

Ambassador

150

250

 

In the case of the American, Jav­elin and Rebel series, an additional $30 is added to the minimum allow­ance and $75 to the maximum al­lowances when these cars are equipped with AM air conditioning.

American Motors has set up these prerequisites: minimum and maxi­mum fleet allowances to he estab­lished for each customer of leasing companies, based on 5% of all makes of passenger cars leased by them individually during the I960 calendar year. Up to the first 5%, minimum allowances will apply. After 5%, maximum allowances ap­ply. The purchase objective is not to be established at less than three cars.

The allowances will be paid di­rectly to the leasing company, who in turn, can pass this benefit on to the customer in their own way.

Plan II is the American Motor Sales Corporation Guaranteed Re­sale Value Plan, offered to volume customers. Under this plan, the Sales Corporation guarantees that the difference between the manu­facturer's (adjusted) suggested re­tail price of any eligible AM pas­senger car and its wholesale value as a used car at the time the leasing company sells it as a used car will not exceed the difference between the suggested retail price and the wholesale value of any comparable car manufactured by a U. S. pas­senger ear manufacturer other than American Motors.

The fleet allowance plan offered to business fleets by American Mo­tors is similar to that for leasing companies, but adds these qualifi­cations:

1.    Any business fleet or utility company owning 10 or more pas­senger cars registered in the com­pany name and listed in the 11. L. Polk & Co. directory.

2.    Those companies not listed in the R. L. Polk directory can qualify by furnishing a notarized affidavit to the effect that they have ten or more passenger cars of any make in use and registered in the name of their company.

The purchase objective of those business fleets which qualify is 5% of the total passenger car units pur­chased and registered in the com­pany name during the calendar year of 1966, or three cars, which­ever is greater.

According to American Motors, "our penetration with fleet accounts showed a very substantial increase during this past year and with our improved and expanded product line for 1.968, coupled with our fleet, allowance program, we are antici­pating even greater interest in con­nection with our 1968 program." American Motors showed a 38% increase for the first seven months of this year in its fleet car sales.

There is no doubt whatever that American Motors is out to get a fair share of the fleet sales market in 1968.

That the Chrysler "Value Plan (or the Lease and Rental Industry" has been a "winning" plan is demonstrated by the inroads Chrysler has made in the lease/rental business in the past year.

Chrysler has strongly pursued its activities this year for its share of the market.

The 1968 Chrysler "Lease-Rental Plan" is similar to that offered for the 1967 model year, but with this one important exception: Imperials must be kept in service for a mini­mum of 24 continuous months, in order to qualify. Other Chrysler cars must be kept in service for a minimum of six continuous months.

The Chrysler predetermined pay­ments to qualified companies for each eligible vehicle it purchases from an authorized Chrysler dealer, is as follows:

 

Plymouth Valiant & Barracuda 

$ 75

Dodge Dart     

75

Plymouth Belvedere &  Satellite & Road thinner

100

Dodge Coronet & Charger

100

Plymouth Fury, Sports Fury & VIP & Suburban 

150

Dodge Polara & Monaco

175

 

Eligible vehicles include all new and unused 1968 model Plymouth, Dodge, Chrysler and Imperial pas­senger ears (police and taxi models are specifically excluded) that a qualified leasing company pur­chases from an authorized dealer up to and including the day before the announcement of the 1969 mod­els and that it places into bona fide leasing or rental service immedi­ately following such purchase.

The Chrysler 1968 Daily Rental Fleet Program calls for a $75 allow­ance for each eligible vehicle that is equipped with factory installed air conditioning and delivered by a Chrysler dealer at any time during the 1968 model year. A 5% allow­ance of the then current factory re­tail price of the vehicles (comput­ed on the same basis as the model change-over allowance) for each eligible vehicle that is delivered by a Chrysler dealer on or after Feb­ruary I, 1968 and prior to midnight of the last day of the .1.968 model year.

Chrysler Leasing feels that the 1968 model year should prove emi­nently successful since "we are only looking for a slight improvement over last year."

Ford's guaranteed depreciation program last year paved the way for this manufacturer to capture its improved share of the fleet market. And Ford will continue with their successful program for the 1968 model year.

Eligible dealers have a choice of one or two of the Ford fleet allow­ance program. Fleet accounts, how­ever, can participate in both of the Ford fleet allowance programs, if they wish, but they cannot partici­pate in both programs with the same car. Thus, on a fleet of 500 cars, the fleet account can have 300 vehicles under one program, while the balance of 200 ears can qualify under the second program.

All Ford 119" wheelbase models and the Fairlane models, with standard transmission, carry a $60 allowance, and a $70 allowance when the cars have automatic trans­mission. The Falcon is eligible for only a $50 allowance, regardless of type of transmission.

For 1968, Ford has included the Mustang in its fleet allowance program. Last year, the Mustang was only eligible on the daily rental plan. Mustangs with standard trans-mission will have a $50 allowance, with a $60 allowance when the Mustang has automatic transmis­sion included.

The Ford daily rental program for 1968 is unchanged, and white wall tires are offered at no charge to authorized dealers.

As soon as General Motors real­ized that the fleet sales market had shown a steady increase . . . com­panies registering 20 or more ve­hicles a year accounting for 7.67 per cent of the total car market through November 1966, compared with 5.81 percent in 1962 . . . it decided to get hack into the battle to regain its leadership in the fleet sales mar­ket.

Thus, the fleet finance plan, de­signed by General Motors will now enable GM dealers to offer competitive financing terms.

The leasing program calls for a guaranteed depreciation on GM ve­hicles - a minimum of 18 months, with depreciation based on how long the vehicle remains in the fleet.

Under the plan, a qualified buyer is any company which buys or leases vehicles and which has bought and registered or leased 20 or more new cars and trucks during the current or preceding calendar year. In addition, a firm which, as a result of buying one or more ve­hicles during the current calendar year, will own or operate a fleet of 20 or more cars or trucks.

GM emphasizes that the plan makes it easy for fleet prospects to buy. No down payment is required for purchases by qualified rental and/or leasing firms, and. the rec­ommended standard down payment for qualified commercial companies is 10 percent of the, retail price.

Dealers must sign an agreement with at least one of the participat­ing firms - GMAC, Universal GIT Credit Corporation, or Associates Discount Corporation where trucks are involved.

The plan also provides the deal­ers protection against conversion. Conversion limits for cars are: after 90 days from the due date of the oldest unpaid installment, and if the vehicle is not recovered by the finance company within this 90-day period, it assumes all responsibility for the vehicle.

On the rental aspect of the GM fleet plan, rental companies are of­fered $50 on each vehicle leased for such use, plus free whitewall tires, plus an additional $75 allowance for those vehicles equipped with fac­tory-installed air condition, and re­maining in service on introduction date of the succeeding year model. In addition, there is the regular 5% dealer rebate on those vehicles placed in service on or after March 1, 1968 and remain in service until the date of introduction of the 1969 models. For a dealer to secure these allowances, the vehicles in service must be "utilized more than 65% of the time by other than dealership service or sales customers."

An important significant change in the CM plan is that an option is provided under which the CM dealer may arrange to assign the allowances or guarantees to the fleet user. This option recognized the many dealer requests who wish to avoid the administrative proced­ures involved in processing pay­ments to fleet users.

The die has been cast: for the 1968 model year on fleet allowance program.

With American Motors definitely in the Meet market with an updated fleet allowance program . . . with General Motors back in the fold with a lull allowance program com­pletely competitive with Ford and Chrysler . . . with Ford and Chrys­ler continuing strong programs in the fleet sales market...it can only follow that the 1968 model year should produce some very lively competitive bidding for the busi­ness that is available.

Leasing companies, business fleets and daily rental companies will find the automotive manufac­turers on their doorsteps . . . but quick ... for the various fleet al­lowance plans all have outstanding dollar-and-cents advantages.

Yes, there's "gold in them thar hills!"

 

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