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For most of us, acquiring a new vehicle is a major decision, one that often begins with retiring a current vehicle and determining how the new one will be utilized. For an organization facing a new vehicle purchase, the process generally is similar, but it also requires advance planning to ensure funding is in place and allowing ample time from order to delivery. Since the onset of COVID-19, however, additional considerations are at play.

OSD’s Office of Vehicle Management, which oversees the administration of the Executive Department’s 2,700+ fleet assets, and our Sourcing Unit are seeing trends in the vehicle industry that indicate even more planning is necessary to optimize selection and price:

  • Plant shutdowns due to the coronavirus have impacted vehicle production and deliveries for some Original Equipment Manufacturers (OEM). Automakers pivoting their operations to supply masks, gowns, and Vehicles on Production Lineventilators added to these delays.
  • Typical model year changeovers have been delayed and some current-year orders have shifted to the next model year, at times delaying new orders as plants “catch up” on their backlog.
  • The impact of social distancing and continued instances of COVID-19 illness at plants may reduce the number of people working on the production line.
  • Certain parts manufacturers are experiencing similar limitations, resulting in vehicle delivery delays, despite ramped up production at OEM plants.
  • Given the coronavirus, delivery timeframes may be exacerbated due to vehicle wait times at ports.
  • The ability to acquire vehicles through other channels, such as dealer lots, have been reduced due to depleted inventories. This avenue, generally a more expensive option due to off-lot fees, maybe even more expensive given current demand.
  • In terms of planning, organizations should expect the possibility of future vehicle price increases as manufacturers attempt to recoup losses suffered during the pandemic.

In addition to timing, buyers should reassess their vehicle needs within the current COVID-19 landscape. Are less staff out on the road, thus reducing your organization’s vehicle needs? Perhaps more vehicles are needed to allow for appropriate social distancing. In the short term, rentals may be a safer option than continuing to use older, potentially unsafe vehicles. Leasing may make sense, particularly when facing budget constraints.

When acquiring new vehicles, OVM recommends buyers place factory orders as soon as needs are identified to ensure a place in the OEM production queue. Entities may explore vehicle options and find available dealers on VEH98. Executive Departments should refer purchasing questions to Cheryl Cushman and contact Karen Rasnick for leasing inquiries.

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