Vehicle lease and management

Purchasing vehicles

The choice of vehicle make, model and any required accessories is the responsibility of the user department or agency based on operational requirements.

Vehicle selection is restricted to those vehicles on the Approved Vehicle List.

Registration

Initial vehicle registration is arranged by the dealer.

The fleet manager should inform the dealer where the vehicle will be delivered and what type of registration plate is required, i.e. government (red plate) or private (blue plate).

VicFleet manages registration renewal for all vehicles under the finance lease facility to a common expiry date of 1 August. Initial registration for all new vehicles should be to the common expiry date.

Vehicle leases

VicFleet manages a whole of Government finance lease arrangement. Funding for the finance lease is provided by Treasury Corporation of Victoria. Under the finance lease arrangement, VicFleet is the lessor and government departments and agencies are lessees.

Under a finance lease, all the risks and benefits of ownership reside with the lessee and are subsequently reported on the lessee's balance sheet.

Lease rates

Lease rates are determined by the lease term and the whole-of-life budget, which includes:

• depreciation (purchase price less residual value)
• cost of funds
• registration
• insurance
• end of life costs such as selling fees, transport and rectification

VicFleet raises an invoice for the budget amount monthly. At the end of the lease, VicFleet disposes of the vehicle, and calculates the difference between the budget amount charged and the actual costs incurred by VicFleet and adjusts the difference with a credit or debit to the client.

Under the finance lease arrangement, VicFleet is responsible for:

• vehicle quotation
• vehicle ordering
• fleet information systems
• financial reporting
• insurance registration renewal
• vehicle disposal
• lease funding
• lease establishment and termination

Lease terms

The lease term is the period over which the vehicle is to be leased. The standard lease term is 36 months or 60 000 kilometres, whichever occurs first. VicFleet offers variable lease terms up to five years, subject to a financial analysis demonstrating a saving to the State.

The correct lease term for each vehicle is determined by the number of months the vehicle is retained to travel its maximum kilometres.

For example, a pool vehicle which is expected to travel 60,000 kilometres per year would have a lease term of 12 month. The whole-of-life lease budget is then divided by 12 payments. Early or late return may impact on the profit or loss on sale.

Variable lease terms are can be arranged through VicFleet.

Residual value

Residual value is the estimated market value of the vehicle at the end of the lease.

The residual value is established at lease inception, and this establishes the estimated depreciation over the lease term.

Residual values vary according to the vehicle model, lease term and the distance travelled.

VicFleet sets residual values based on industry forecasts and direct knowledge of trends in secondhand vehicle markets. A conservative approach is adopted to reduce the financial risk of significant losses on sale of vehicles.

Residual pointers:

• vehicles with higher kilometres generally yield lower residual values;
• vehicle colour is important; and
• vehicles in good condition have higher residual values.

Pre-paid servicing

Pre-paid vehicle servicing (pre-paid scheduled maintenance) is available from some vehicle manufacturers under the motor vehicle State Purchasing Contract.

Pre-paid service is optional and fleet managers should specify their requirements when placing their new vehicle order with a manufacturer's authorised dealer.

Service schedules and intervals vary between manufacturers and vehicle models. Details of vehicle service schedules are contained in the service book supplied with all new vehicles.

For further details contact VicFleet on cars@vicfleet.vic.gov.au

Service costs

Fleet managers may purchase pre-paid servicing (dependent on availability). The associated costs are incorporated into the lease payments.

Pre-paid non-scheduled maintenance

Pre-paid non-scheduled maintenance is an extended service alternative to the pre-paid scheduled service option.

Pre-paid non-scheduled maintenance is a total maintenance package that offers convenience and administrative cost savings by eliminating the accounts handling associated with payments for vehicle servicing.

Pre-paid non-scheduled maintenance is an option available for some vehicles, and the costs are incorporated into the lease payments.

Disposal of vehicles

VicFleet disposes of all lease vehicles by public auction. The Government's contracted provider of auction services is Pickles Auctions.

Auctions are held every Tuesday morning at 10am.

VicFleet is responsible for:

• inspecting the vehicle
• detailing the vehicle
• rectification
• setting the reserve price
• arranging the sale
• distribution of the sales proceeds

State Purchase Contract for Motor Vehicles

A State Purchase Contact is in place for the purchase of passenger vehicles, light commercial vehicles and motor cycles. Only vehicles on the Approved Vehicle List may be purchased, except where there is no vehicle on the Approved Vehicle List that meets fit-for-purpose criteria.

Vehicles must be purchased from the manufacturers authorised dealers.

Visit the Victorian Government Purchasing Board to find out more about vehicle contracts.

Fuel information

To find out more about the provision of fuel and associated products and the use of fuel cards, visit the Victorian Government Purchasing Board website.

No purchases other than fuel and oil are permitted on fuel cards, and cards may not be used for the purchase of any product for private use.

All drivers must provide an accurate odometer reading each time they refuel their vehicle.

Roadside Assist

Roadside assistance is available from the following vehicle manufacturers, the table below details the emergency number to call.