Managers should however tread carefully, as downgrading an employee?s car can have a demoralising effect on the individual concerned, particularly on a salesperson, which can of course prove counter productive for the company. Sometimes the difference in contract hire costs between the car the employee wants and a lesser model can be so small that it is not worth the risk of damaging the employee?s moral.
It is important when it comes to decisions on salespeople?s cars that somebody within the sales management team, who understands salespeople, is involved in the decision. It?s a sad fact that accountants often can?t see why salespeople should drive a nice car when after all it?s only a tool for them to do their job. This thought process although quite common displays a lack of understanding as to what makes salespeople tick and what makes them successfully carry out their vital role; of bringing in new business for the company.
It would not seem sensible to start paying out high leasing costs for a salesperson to drive an expensive BMW, when a company is facing difficult economic times. However if there is not a significant difference in the contract hire cost of the BMW or Audi the salesperson wants and the Vauxhall or Ford he doesn?t want, is it worth making them feel uncomfortable about the car they are driving?
Sometimes there is not a great deal of difference in monthly leasing costs between a car that is considered more of a luxury car and what you would call a more run of the mill car, why is this? It is often because cars such as VW, Audi and BMW have strong residual values and there are two important factors that determine what a finance company is going to charge for a car; what it pays for the vehicle and what the vehicle will be worth when it comes to dispose of it, usually after three years. Hire purchase for example is a contract where the residual value is of no relevance to the finance company, unless of course they have to repossess the vehicle.
Sometimes company accountants get caught up in saving £10 or £12 per month in contract hire costs on a salesperson?s vehicle but after all what does that represent a year? Less than £150, how much extra does a salesman have to sell to recoup that relatively insignificant sum of money?
Salespersons egos are very fragile and if they feel better about themselves turning up to an appointment in an Audi rather than a Ford, then they will generally sell more and make more money for the company. If the company wants to make sure it covers the extra contract hire cost of the Audi or BMW set the salesperson an extra target to pay for the improved car, they will achieve it.
If you want salespeople to achieve even more sales, when the leasing contract come up for renewal, talk about an upgrade to an even better car (target related), there is no more effective way of getting salespeople motivated. The accountants may not agree but then accountants and salespeople live in different worlds.
