Trucks
Trucks
As a truck owner, a service contract can contribute to less worry and a more efficient and profitable business, but there are multiple options to choose from. This is what you need to think about when choosing the best contract for you.
In essence, a service contract should deliver increased uptime and lower costs. Their purpose is to offer security, stability and peace of mind – however, the best alternative can vary depending on your operation as well as your needs.
“For some, a service contract means receiving the very best service no matter the situation, while for others it means being able to budget with fixed, predictable costs each month. So, when you’re looking into service contract offers, it’s important to ask yourself ‘what support do I need for my business?’ and then choose the service contract that gives you that support,” says Jonathan Cooper, Vice President Service Contracts, Volvo Trucks.
It’s important to ask yourself ‘what support do I need for my business?’ and then choose the service contract that gives you that support.”
There is no one-size-fits-all when it comes to service contracts. Make sure that the company offering the contract has considered your unique circumstances when formulating an offer. It is important they understand how your vehicle will be used. For example, the road conditions where it operates, the geographical area it covers, the type of consignment it transports. These types of factors will affect the coverage you will require.
Standard packages are often offered at a low price but include a long list of exclusions in coverage that add extra cost when selected. Check the terms and conditions and determine what is and isn’t covered, and make sure it meets all your needs before comparing prices.
Some service contracts only cover component failure – not general wear-and-tear. Depending on your operating conditions, you could be left with some steep repair bills if your contract doesn’t cover the wear-and-tear as well.
This is when a failed component causes another failure in the vehicle. Some service contracts offer complete coverage and will cover both the failed part and the consequential damage – but many service contracts only cover the initial failure, leaving the cost of repairing the consequential damage to the customer.
A supplier should honor all active fitted parts warranties regardless of the service contract’s status. Make sure that there are no provisions that enable them to avert responsibility for the length of parts warranty once the service contract ends.
Without a service contract, a business can be subjected to sudden and unexpected repair bills. These can be difficult to budget for, and without adequate savings, the financial risks to a business are enhanced. A service contract can reduce the need for a financial buffer and give owners the stability of fixed monthly costs.
With a service contract, the total expected cost of servicing and repairing a vehicle is spread out across the duration of the contract. This means the service contract monthly fee may seem high in the beginning, when the truck is new and needs few repairs, however it will prove to be cost-effective from a TCO perspective in the long run.
Regular servicing and maintenance, using genuine parts at the OEM certified workshop, will help keep a vehicle in excellent condition and by extension, maximize its resale value on the second-hand market. This is an important factor in TCO calculations too and should help you determine the cost effectiveness of a service contract.
With regular servicing and maintenance, a truck will operate more efficiently. Procedures such as wheel alignment, maintaining correct tire pressure, updating software, ensuring correct oil levels and clean fuel as well as fitting correct air filters, will all contribute to reduced fuel consumption.
