Full transcript10 chapters · 8,921 words
00:00Why a paid-off truck isn’t the cheapest truck
Renee Milum: Lease or buy, wrap or don’t, replace it five years or eight. The fleet decisions trade owners are making by default are costing them tens of thousands of dollars a truck. Let’s run the real math.
Tyler Martin: Welcome to Profit and Grit with Tyler, where blue-collar owners and insiders spill the real story behind their hustle, building businesses that thrive through sweat and smarts. We’ll dig into their journeys from scaling chaos to growing the bottom line with lessons and grit that pay off big.
Tyler Martin: Here’s your host, the blue collar CFO, Tyler Martin. A lot of trades owners think the cheapest truck is the one that’s already paid off. But that’s not always true. Once you add repairs, downtime, maintenance, lost revenue, and the cash tied up in a depreciating asset.
Tyler Martin: Today, I’m talking with Rene Milam, a fleet advisor with JumpSpark. Rene helps small and medium-sized companies make smarter decisions around buying, leasing, replacing, upfitting, and managing their vehicles. In this episode, we get into the math behind fleet decisions. When should you replace a truck?
Tyler Martin: Does leasing actually make sense? What does downtime really cost? and why looking only at the monthly payment can lead owners into bad decisions. The cost of vehicles are one of the biggest expenses in your shop, and Renee does a great job explaining some of the pitfalls.
Tyler Martin: Let’s talk with her now. Hey, Renee, welcome to the Profit and Grit Show.
01:35Twelve years in fleet and what a fleet advisor does
Tyler Martin: How’s it going today?
Renee Milum: I’m doing fabulous. Thank you for asking, Tyler. Thanks for having me on.
Tyler Martin: Yeah, thanks for being here. So I’d love to start out just learning a little bit about you. What do you do professionally? And then if you’re open to it, maybe sharing a little tidbit about yourself personally.
Renee Milum: Sure. So I have been in the fleet industry for 12 years. So right now I’m currently a fleet advisor for JumpSpark and I love it. I enjoy every part of it. It gives me a lot of freedom when I need it because I get to work from my home.
Renee Milum: But it also helps me. It allows me to help a lot of people out there that are either small to medium sized companies really needing to help grow their fleet and just, you know, operate a better fleet.
Tyler Martin: Love it. How about something personal? Anything, hobbies, anything you’re into?
Renee Milum: Yes. Well, I’m a mom. My son is 17. He is going to graduate from high school this year. And we both like to go out and play a round of golf when we have some time.
Tyler Martin: Nice. Nine hole or 18?
Renee Milum: I like to do 18. He likes to do 18 too, but we usually just come and play nine.
Tyler Martin: Yeah, I’m usually a nine guy. Like 18, my attention span starts to go after nine. I hate to admit that. Hey, so what exactly is a fleet advisor? Could you, for the folks out there that might not know, what is that role?
Renee Milum: Yeah. So what my goal is, is to work with companies to help them, you know, source vehicles, get into the right vehicle, get it upfitted correctly, providing a turnkey type solution for their fleet. So one, they can save money and two, they can focus on what their expertise is and taking
Renee Milum: care of their clients. So we provide as much as we can take as much off their plate as they need. And it’s a full circle of things, whether that’s, like I said, financing, sourcing, maintenance management, fuel cards, telematics, cameras, remarketing, right?
03:21How the leasing math and management fee are structured
Renee Milum: Selling the vehicles also. We can handle any and all of that for them as much as they need. But also my goal is to, you know, getting them into the right term of lease based on their annual mileage. Lots of people make the mistake that they go into a dealership to finance and they’re looking at monthly payment.
Renee Milum: What can I afford? Right. And they go from that perspective. So my goal is to make sure you’re I’m looking at your fleet wellness. I’m here as a long term partner. I’m here to help you give you as much information as you need to make better decisions because we know how the fleet can impact the bottom line.
Tyler Martin: For sure. And how do you get compensated ultimately? Is there is there a commission or is it tied into how you price the vehicle?
Renee Milum: How does that work exactly? It’s tied into the actual lease itself.
Tyler Martin: OK. OK.
Renee Milum: So there’s an input component that goes to the banks, but then we also add what we call a monthly management fee that’s tied into that payment.
Tyler Martin: Got it. And does it also include, do you guys have some type of maintenance service built into that? Or is that independent of something like this?
Renee Milum: It’s independent. Okay. All of our services are a la carte. If they want an actual program built in, they can, and they can do it. And it’s just not on the lease ones, but also on their entire company-owned fleet if they wish. Okay.
Tyler Martin: How does this compare or is it kind of the same? You know, I’ve worked with various fleet management companies like Enterprise or there’s a whole, you can name whichever one. Is this pretty much the same thing or is there something different about your guys’ approach similar to a typical fleet management that I’ve seen?
Renee Milum: So similar, it’s interesting you ask because I actually work for Enterprise. I know exactly what to do. The actual leasing component doesn’t matter whether it’s a Holman or Mike Albert or an Enterprise. The leasing component is the same. It’s an open-ended equity type of lease is what we do.
Renee Milum: But what makes JumpSpark different is that there’s no minimum, right? We don’t care if you have one vehicle or 100 or need one vehicle or need 100. We’re going to help you put you in the right term to lease the vehicles. We’ll help you fleet up as quickly as you need to or fleet down.
Renee Milum: So if you go to enterprise, most of the time they won’t even deal with you if you have less than 20 vehicles. So we really, our focus is really on the small to medium sized companies.
Tyler Martin: Do you guys offer something where there’s like a panel or some type of back end where it shows the fleet that the owner has where maybe the stage of life it’s in or mileage or something like that? Do you guys go to that level or is it, what does that look like?
Tyler Martin: Is there some back end information provided on the fleet?
Renee Milum: Yeah. So like most of the time, if I have a company who wants to talk about strategy, they’re going to send me their fleet list, right? So I have a couple of meetings today and our goal is we’re going to look at the actual vehicle itself, how many miles it has on it, what it’s worth today
06:06Replacing between 80K and 100K miles is a moving target
Renee Milum: versus what it might be worth in 12 months based on that annual mileage pattern, and then really discuss what’s the strategy, right? Because most people can’t afford to replace their entire fleet within a year, even though it may need to be replaced, right? So that is part of what we provide.
Tyler Martin: You know, one thing that I know has been presented to me when talking to various fleet people is oftentimes they’ll say, you know, there’s a certain peak time of when you want to turn your truck in to get maximum value for it and then reset it with a new one. You know,
Tyler Martin: a lot of times our thinking is, oh, we’ll drive it until it dies. What is your general logic or strategy when it comes to that?
Renee Milum: So I’ll be very honest. I mean, the optimal time to replace is a moving target. Okay. Based on AI now that we’re using and all the information that we collect from about half a million vehicles based on model engine and all that. We know an optimal time to get out of a gas
Renee Milum: engine is right between 80 and 100K. That’s really when you’re going to look at replacing it. One, because your warranty is going to be up, your powertrain is going to be up. And then also the percentage that something catastrophic mechanically that’s going to happen ticks up
Renee Milum: by about 36% after that 100K. So we really know that. But things, you know, the things in the industry influenced that. Like during COVID, the optimal time to just replace as soon as you could because used prices were so through the roof. Problem is, is we couldn’t find enough vehicles
Renee Milum: to do that. So that’s what I mean by a moving target, right? The industry will affect the time to replace, but based on all the data we have, like I said, we have that information to help you
07:42Owners who don’t know what downtime costs them
Tyler Martin: make that decision. So that’s good stuff. When you meet with, let’s say a business owner, somewhere between five to 10 million. Is there a certain reaction that they give you as it relates to their fleet that surprises you? Or maybe now you’ve gotten used to it, but it kind of surprises
Renee Milum: you? It surprises me when I talk to a client about, they’ll be like, yeah, I have this vehicle, it’s paid for. It’s not costing me anything. But when I say, but what happens when you have a breakdown? Oh, well, I have a spare. But still, they don’t know the actual cost of what the
Renee Milum: downtime is, what that, how much, if they were to actually add up the revenue that they’re losing along with what it’s costing for the actual repair, along with what they’re, you know, still paying their employees, that that becomes a considerable amount, right? And it’s actually
Renee Milum: a lot more than if they were making lease payments for a year. So I’m really surprised that, you know, they don’t, they don’t know what that cost is. I understand it because obviously they’re running business, right? They’ve gotten many, many hats on and they’re looking at multiple things, but
Renee Milum: very surprising that a company that’s doing that, that kind of revenue doesn’t know what,
Tyler Martin: how much downtime would this really actually costing them. Right. That’s a huge one. The other one that always surprises me is because I get to see the P&L, so I kind of see everything and it’s, it’s how much the repairs and the maintenance of the vehicles are costing when
Tyler Martin: they have an older fleet. And it’s just not really, that’s not being really analyzed. It’s more like, okay, well, it’s just another thing we have to repair. That’s going to cost five or $10,000 or whatever it is. And it’s not really thought in terms of a strategic decision of,
Tyler Martin: well, what is that really costing me of the life of this vehicle now, as it relates to how often I’ve had to pay for repair versus how much to your point, downtime or other things going on. And that kind of always catches me off guard a little bit.
Renee Milum: Absolutely. I agree. Like you say, more people look at it as I don’t have a payment, but But they don’t really look at it still. The payment is such a small portion compared to fuel maintenance depreciation, total cost of ownership.
Tyler Martin: Yeah, that’s a good one. Is there, and maybe we already covered it, is there a misconception when it comes to cost of the vehicle that sometimes operators believe, but it’s not necessarily true? Does it really fall into the maintenance of it, or is there another misconception, would you say?
Renee Milum: If I had to think about misconception, like I said, it’s interest. Okay. Okay. Look at total cost of ownership. Like when people usually buy used vehicle, pay cash for it, they think they’re saving themselves a lot of money because they’re not having an interest component or they don’t have a payment. What they really don’t understand
Renee Milum: is when you look at that, what we kind of just mentioned, when you look at total cost of ownership, interest is only 5%. It’s very, very small over the lifetime of the vehicle.
Tyler Martin: Yeah, that’s a good point. Do you find like when it comes to resale value of you talked about this a little bit and there’s no perfect answer to it, but if you were managing a fleet of 10 or let’s say you’re working with a client with a manager with a fleet of 10, are you basically monitoring their mileage and kind of saying, hey, once we get up to a certain level and assuming AI and the market conditions all align, is that when you’re saying to turn it over, even if necessarily the car is in the truck is in perfectly good condition?
Renee Milum: absolutely uh i meet with all my clients on a yearly basis and we talk about as part of the strategy right we look at the vehicle we look at where they’re at mileage based knowing what is going to probably go for another year i will give them numbers for what we what would happen if we
Renee Milum: sold it now and numbers if we waited the the 12 months with the the new mileage on it and make decisions from there and then also talk about what is going on in the market right so you know maybe A lot of people don’t know that the aluminum plant for the F-150s has burnt down, right?
Renee Milum: If you’re a Ford fan, I’m saying, hey, we need to get them now because the price is going to spike. All right. Even if, you know what, this vehicle’s only got 80,000 miles on it. Is it good for probably another 20? Yes. But you like this type of vehicle.
Renee Milum: You’re going to pay more in 12 months if you wait. Let’s look at replacing this one now. So things like that as well.
Tyler Martin: Yeah. Those are important considerations. I think a lot of times just get glossed over, frankly, or don’t even get acknowledged.
Renee Milum: Yeah. I mean, lots of people ask me all the time, what’s the most reliable vehicle today? It depends on the year, to be honest with you. 2024, I had nothing but trouble with Fords and the compressors, right? The year before that, it was the Rams. This last year, unfortunately,
Renee Milum: Chevrolet just had a lot of bad things that were happening. So if I had a crystal ball,
12:17Open-ended equity leases versus paying cash for a used truck
Renee Milum: I wouldn’t probably be here, but I just, you know, that’s part of what a fleet advisor is, is, you know, what’s going on in the market, right? What’s happening with the manufacturers and bringing that information to light to, like you said, help keep prices down as much as possible.
Tyler Martin: Knowing there’s that uncertainty of knowing which model and which year is maybe going to be a lemon, for lack of better words, would it make sense then generally to buy a year-old vehicle as opposed to like maybe not get a 2026, but get a 2025 that maybe already has some history in terms of reliability?
Renee Milum: Absolutely. That’s certainly an option we would consider.
Tyler Martin: Okay. Okay. That’s interesting. Okay. Now I want to get into the age old question. Do you buy, do you lease? Does it matter? What are your thoughts around this? I’d love it. Cause this is the first thing almost everyone asked me. So I’d love to know your thoughts.
Renee Milum: It does. It comes up all the time. And I guess I just want to clear the one misconception when people lease, they think retail lease, right? They think, Oh, I’m going to have mileage restrictions. You know, I’m going to turn this vehicle in. I’m not going to get anything at the end of, you know, at the end of its term or whatever, or maybe maintenance is included.
Renee Milum: These are open-ended equity leases. So they’re built for commercial companies because there are no, you know, mileage restrictions or anything like that. It’s equity, open-ended equity, which means you’re going to take that equity, no matter where we are in that lease term, and roll it into a new vehicle tax deferred, right? So you get to capitalize on that equity portion of it.
Renee Milum: I mean, the biggest thing why lease instead of buy is cash, right? Cash is king. Some people are like, oh, I have the cash. That’s not an issue. Well, then invest it somewhere where it’s going to make you money or use it on marketing or, you know, lease or something else in the business
Renee Milum: other than a depreciating asset. So leasing is, you know, conserve your cash or use it strategically somewhere else. Two, you have a lot of tax, larger tax benefits typically than financing when you lease that people aren’t aware of. Get more, you need to write off more. Like, oh, but
Renee Milum: I’m paying this much more for it over time. But the write-off that you get, like look at the bigger picture, is going to be far larger than the amount that you’re actually paying. There’s lots of sales tax benefits that people aren’t aware of when it comes to leasing. They don’t have to pay upfront
Renee Milum: sales tax. And the fact that you can roll everything into a lease. When you go to the dealership and finance something, you usually have to pay for the upfitting. So like if a van needs shelves or if you need a ladder rack or a toolbox, typically you have to pay that out of pocket. And then when you
Renee Milum: go, if you’re, if you’re branding, right, if you have a full rep or a partial rep, whatever it may be, you usually have to pay that out of pocket. By leasing, we can roll everything into the lease
Tyler Martin: and have that as one payment. Wow. And then Renee, I want to clarify on one thing. When we use the
15:00Rolling wraps and upfitting in, and the 90-day factory order
Tyler Martin: term lease, we have the option though, let’s say I’m buying a truck from you. I have the option to have the legal title of the lease. Is that correct? Where I can take that accelerated depreciation. So it’s not a true lease in the sense that like I’m giving it back necessarily at the end of the
Tyler Martin: lease. It’s more of like a capitalized lease. Am I saying that correctly? And is that the way it’s
Renee Milum: structured? You’re correct. It’s actually beneficial either or. So your CPA can, depending on what you need for that tax year can either use it as a capital lease and depreciate it, bonus depreciation, or they can use the operating lease type of structure.
Tyler Martin: Got it. And so really, when we talk kind of like buying it, it’s really like going to a dealership and they might put you on a finance schedule or something like that and wrap in a bunch of stuff to it. Really, and legally, I think they’re probably both the same, but I think probably
Tyler Martin: under a fleet deal and as a capitalized lease, I would argue, and correct me if I’m wrong, you’re probably getting a better, you’re probably getting a more efficient cost. It’s probably either cheaper or less expensive doing it that way. Am I saying that correctly?
Renee Milum: That is correct. Yes.
Tyler Martin: Okay. Okay, cool. Okay, good stuff. That’s good. And you gave a great answer on that. I love that. What about like, you know, the common question that I get when people are considering a lease is, hey, I need to do a wrap or I need an uplift kit, I think is what they call it,
Tyler Martin: or I need this or I need that. How does that relate when you’re looking at a new truck? Is that something that you build into the cost or is that something they do after the fact?
Renee Milum: We build it into the cost. Okay. So like I said, as part of my job is I provide a turnkey, what I call a turnkey type service. So you tell me what you need. We’ll dial in how you want it upfitted. Design file, like I said, whether you’re doing decals or a full outright wrap.
Renee Milum: Once it gets delivered to you, it’s ready to go. It’s all done. It’s going to start generating revenue.
Tyler Martin: new. What would be a timeline like generally, and I’m sure this is going to vary, but is there a general timeline that when you’re talking with an owner of when they should be planning to have that new vehicle? Like, should they be thinking 90 days in advance, 60? Is there a general timeline?
Renee Milum: I mean, so it was kind of the question of what I was looking at earlier, what, you know, what’s, what should an operator do, you know, in this next quarter, you should be as proactive as possible. A lot of people, a lot of business owners are reactive.
Renee Milum: But if you’re truly being proactive, you know, we can look, I would look 90 days out. That’ll allow us to actually factory order a vehicle just the way you need it. You’re not paying for any extra options. And we can get it and have it upfitted and ready to go in 90 days factory ordering.
Renee Milum: Does that always work that way? No. So if you need something immediately, you know, I would say four weeks, four weeks out. You should be starting to plan something. If I have to get it from stock, get it up, fitted and wrapped, it’s going to be probably four weeks to do that.
Tyler Martin: Probably a month to me is pretty fast. I was thinking you’d say eight weeks. Four weeks is actually pretty good.
Renee Milum: You know, the biggest holdup is if there’s any kind of like shelving or ladder racks or anything like that that has to be ordered, right? Tariffs kind of, you know, made things harder to get, like take longer to get like Adrian steel products, that type of stuff.
Renee Milum: So if you’re not specific about the manufacture of the actual part itself and something that the installers have in stock, we can make it happen pretty quickly.
18:24Skip the extended warranty if you cycle at 100K
Tyler Martin: Yeah. OK. I want to talk a little bit more about just maintenance plans. Does it make sense generally to buy a maintenance plan, like a maintenance plan where major repairs and replacements are included? Do the numbers usually work out? What are your thoughts around a maintenance plan?
Renee Milum: When you say maintenance plan, are you referring to like warranties or like a maintenance management plan?
Tyler Martin: Probably more like a maintenance management plan where like, and I may be using the terminology wrong, so feel free to correct me. But I’ve seen a lot of times where they’ll add in, and I’m making this number up, but for like $5,000 a year, you’ll get, you don’t get any basic service.
Tyler Martin: But if anything major happens to the vehicle, the transmission goes down, it’s covered, whatever, that type of plan. Is that more of a maintenance?
Renee Milum: I believe it’s a maintenance. A warranty type of what you’re talking about, warranty coverage. I never advise my clients to take warranty coverages if it’s on something new. If you’re buying it fleet through a fleet management partner, one, you’re going to get an extended powertrain warranty anyway to $100,000,000.
Renee Milum: And as I kind of mentioned before, the sweet spot on a gas engine is $100,000. So if you’re truly cycling at the right time and you have already had the manufacturer’s warranty, there’s no need for you to spend that type of money.
Tyler Martin: Okay. And just to clarify, in case someone didn’t catch this, at let’s say our cycle period, we had 100K at three years. So in theory, we’re going to start thinking about turning it over in three years is what I think you’re saying. And correct me if I don’t have it right.
Tyler Martin: But at three years, how much major repairs are we going to have in only three years of a new vehicle?
Renee Milum: It’s really unlikely. So if it really was $5,000 a month that we were spending on maintenance, we’re probably throwing that $5,000 a year, which is $15,000 away. Is that kind of how you, am I thinking of it right?
Tyler Martin: Exactly. Yeah. Because you’re going to have warranty from the manufacturer. So 36,000 miles or three years, it’s bumper to bumper. The next $500,000 to $100,000 is powertrain warranty, which is your major components, right? Transmissions and that type of thing. So like I said, if you’re truly going to cycle at $100K or less, you would be throwing away that $5,000.
Renee Milum: Got it. Okay, that makes a lot of sense. And so that’s your general recommendation, $100K, start thinking about turning that vehicle over.
Tyler Martin: Correct. $80K to $100K, really.
Renee Milum: Is there some statistical data for that? Or is that just your many years of experience that things start to fall apart at 80K to 100K in mileage? Is there some basis for that?
Tyler Martin: No, it’s actual data that we collect. So we have from our maintenance management program, we have about 600,000 vehicles on that program.
21:08Maintenance management and keeping repair shops honest
Tyler Martin: Like I said, all makes, all models, gas, diesel. And we’re also using AI now to help us generate that data about when to get out of the vehicle.
Renee Milum: That’s awesome. And then since I kind of messed it up and I really called it an extended warranty maintenance management, What is maintenance management? What’s the definition for that?
Tyler Martin: So a maintenance management program, it’s basically what it is. If you have, I recommend it for people that have a fleet of 15 or more. It’s really, it’s impactful. So there’s different types of programs. The one that we actually have is a discount program so that we have a network of vendors
Tyler Martin: across the United States. You can take your vehicle into that network of vendors instead of you having to pay out of pocket for it. It’s all integrated. and then all that data is kept in a software platform. Okay. So that you can see, you know,
Tyler Martin: which vehicles cost you the most in maintenance, right? That’s another maybe outlier when you want to start replacing it. And then you also have certified technicians who are the experts. Like if you have a vehicle that goes in for non-preventive work, they’re going to review that
Tyler Martin: and they’re going to, you know, one, they’re going to make sure that the shop isn’t overcharging you for labor. Does it really need to be done? They’re going to look at the year of the vehicle and say, oh my gosh, $7,000 in this vehicle is like almost eight years old. Does it really make
Tyler Martin: sense? Right. So they’re looking at all that information over for you. Like I said, just to give you better, better advice about, you know, do you do the repair or do you replace the vehicle?
Renee Milum: And if you are repairing it, they’re just keeping that, that vendor in line. Right. Yeah. I mean, most, most business owners don’t have to, aren’t the expert when it comes to fixing a vehicle, right someone comes to you and says hey it needs all this work it’s going to be eight thousand
Renee Milum: dollars is that like do you know is it really going to cost that much and that this program
Tyler Martin: helps keep those vendors honest yeah and you can do gives a the owner peace of mind of the business
Renee Milum: that you know i’m not being taken advantage of yeah that’s huge for this that’s huge do you also as part of those i guess they’re like suggested vendors to use do you get better pricing than if
Tyler Martin: You just went to them outside of these maintenance management agreements? Correct. Yep. There’s a discounted rate for preventive maintenance.
Renee Milum: Okay.
Tyler Martin: And is that something this network is throughout the United States? Correct. Yes.
Renee Milum: Okay. Have you ever found any areas that aren’t covered that well, or do usually most areas have serviceable locations?
Tyler Martin: I mean, there might be some outlying areas, like maybe North Dakota, if you’re not in like Fargo or something like that, sure. There’s going to be some outline areas that are going to
Renee Milum: make it more difficult. Got it. Okay. I know we’re not going to do a heavy number section, but it would be a shame not to at least cover something. So I’m probably going to be a little redundant here. Normally I spend a little part of this show around talking about
Renee Milum: a couple of numbers. And so the ones I really want to drive home, we’ve already talked about a little bit is the a hundred K. I think that’s a significant number to you in terms of how your day to 80 to 100K in terms of usage where you start to look at potentially replacing the vehicle.
Renee Milum: Is there anything else that you can think of in terms of that 80 to 100K? Let’s say someone puts on really high freeway mileage and that makes that 80 to 100K come up faster. Would that change
Tyler Martin: your view on it or is it pretty much 80 to 100K? It doesn’t really matter. It does a little bit because you’ll have some vehicles are in idle, right? And so even though they may have low mileage, they might be an idling type of vehicle. So that’s still the same kind of philosophy,
Tyler Martin: right? Because even though it doesn’t technically show 80,000 miles, you have that wear and tear on the engine. So that has to be taken into consideration as well. And they’re like, oh, but this is city miles versus highway miles. Doesn’t really make a difference to be honest,
Tyler Martin: right? Because when you go on to go to an auction or wherever you’re selling it, the dealership, they’re going to look at that vehicle based on the model, the trim, and then the mileage. Those are the three main things, right? And that’s where you’re going to get your pricing.
Tyler Martin: So like I said, the only thing that makes it a little bit different is if you have a high idling type of vehicle that does come into consideration. And then also we didn’t talk too much about diesel. Diesel is higher. You’re going to replace it at a higher mileage point
Renee Milum: than the gas engine. Is there a general range for diesel or?
Tyler Martin: usually 130 250 okay it’s the kind of optimal time for a diesel engine does that make diesel
Renee Milum: but then i guess the the fuel cost is higher does that make diesel generally a better option or do
Tyler Martin: you have an opinion one versus the other it depends on the application of the vehicle itself okay so i have a client who does snow plowing in the winter time and he is probably makes more sense for him to get a diesel he may not necessarily need it but because of what he’s doing
Tyler Martin: and the fact that that $10,000 is going to bring a higher resale at the right time. Plus he’s going to be able to, right. He’s going to look at selling at a higher mileage level at a longer time. So it would make for him, it makes financial sense to actually pay the extra 10 grand for
Tyler Martin: that diesel engine.
Renee Milum: That’s not really that big of a cost. I thought it was more than that. About 10 grand for diesel versus gas. Interesting. Okay.
Tyler Martin: And then the other one I just want to kind of bring home too is just, cause I think it’s a really great point on your part. Because a lot of times when we think about interest rate, we throw that in and that’ll throw us off in our buying decision. I love how you kind of equate it.
Tyler Martin: Can you talk through that for us one more time, just in terms of how we should think when it’s
Renee Milum: the interest rate? I guess the best way to put it is if you have $200,000, right? Yeah. And you have to spend $200,000. Does it make sense to put it into a depreciating asset? One. Oh, I want to stay away from the interest rate, like I said, it’s only 5% of the total cost of the vehicle.
Renee Milum: If you have $200,000, you should either, like I said, using it strategically, which means maybe you should look at financing or buying your building, right? Your building is going to appreciate 498 of the Fortune 500 companies lease vehicles, right? And that’s because they know if
Renee Milum: they have, they’re going to use their cash strategically because the interest is such a small portion of financing or leasing a vehicle. Yeah, that’s good stuff. Yeah, that makes a lot of sense. I love your benchmark to a 5%. I think that makes it easy for people to understand that
Tyler Martin: and just to equate, bring home your point of how do I want to utilize my cash? Thank you. That’s good stuff. Let’s talk about downtime a little bit too. It doesn’t have to be still in the numbers part here. We don’t have to necessarily use actual numbers because I know it would vary,
Tyler Martin: but can you bring home a little bit the whole downtime concept? Because I think we forget about that. I’ll give you a real example. Talking to a client last week, he says to me, oh man, I’ve got two trucks sitting in my parking lot that have been there now for six months.
Tyler Martin: One guy I promoted to an operator in an administrative role. And so I thought I could find someone right away. So I didn’t think it was that big of a deal. But now six months later, he hasn’t found someone. And then the other person he had fired recently, I think it was
Tyler Martin: like three months maybe. So it wasn’t the full six months. And he hasn’t been able to find another person to replace that. So he’s had two vehicles sitting there that he’s paying for that aren’t producing. So I’d love for you to kind of just give your thoughts around downtime and how we
Renee Milum: should be looking at that. Yeah. So, I mean, as I mentioned, what surprises me is that a lot of people don’t, and they don’t have time to figure out and put the numbers together, as you mentioned, for downtime, right? Downtime could be exactly what is it costing you for the vehicle just
Renee Milum: sitting there. And then after it’s been sitting there, you know, does it need a new battery or, you know, what has happened to it after it’s been sitting there, then you have to take into the consideration of, you know, when you have a breakdown, you know, how much, how much time
Renee Milum: is it taking away from your employee? Like you’re still paying your employees, but they’re, you’re paying them not to generate revenue. You’re, you’re paying them to, you know, help with, you know, replacing or for this breakdown of the vehicle. And then if I were to ask you, if, if you didn’t
Renee Milum: have the vehicle for a whole day, just like you don’t have, you don’t have an employee now to generate, what does that cost you? How much revenue do you, are you actually losing for a day or eight hours of work? You have to look at all those, all those types of things. They all play
Renee Milum: into that, that downtime role. And then like, if it is a maintenance issue, then you have to add the cost of what it, you know, the repair itself. So there’s many factors that go into downtime that people just don’t, they don’t have time to actually calculate and figure out. I’m, you’ll be
Renee Milum: surprised if I asked somebody how much, you know, how much revenue they lose in eight hours, they don’t know. They actually would be like, oh gosh, I don’t know that figure right now. Or I’ve never, you know, actually, you know, sat down and looked at it, but so it’s a sneaky thing,
Tyler Martin: downtime. It is. It’s real. A lot of people will even, like I said, they think they have a spare, whatever there’s, it’s still, I mean, there’s downtime and preventative maintenance. So there’s no way of getting away from it. It’s a real cost. It just doesn’t always seem to be at the forefront
Tyler Martin: front of everybody’s mind when they look at operating a seat of vehicles.
Renee Milum: Yeah, it’s a good topic, though. I like talking about it. I think bringing awareness to it because we do tend to gloss over that stuff in this industry. I think it’s important to talk about it. What have I before I get into my last segment that was more of like a looking ahead?
Renee Milum: What I was thinking is there’s got to be some things that you’re typically faced with when people are asking you questions, owners, or they’re maybe not considering. And maybe there is maybe I’ve done a good job for once and I actually covered everything.
Renee Milum: but I figured there might be a couple of things I might’ve left out.
Tyler Martin: I guess if anything, I’d like to just conclude with also the lease itself. Like I said, these are open-ended commercial leases. Most people think that I had someone say to me the other day, we don’t, Renee, we don’t want to be stuck in a lease for five years.
Tyler Martin: You’re not stuck. They’re flexible, which means if we need to sell that vehicle, we can do that at any time. There’s no penalty to do that. Or some people are like, well, I want to own my vehicle at the end of it. I don’t want to have to give it back.
Tyler Martin: You can, you have that right to pay it off and take ownership at any time. And also just talking about, part of my role is putting you in a lease based on your mileage, right? Giving you the right term is very, very important, right?
Tyler Martin: Because we are adding upfitting to the leases. We’re adding graphics to the leases. So you’re going to be upside down for the first year. That’s just because of all the extras we’re adding to it. But our goal is to get you to that point
Tyler Martin: of either being neutral or where you’re starting to build equity because we wanna be able to sell that vehicle and either roll up those proceeds into a new one tax deferred or give you a cash, a check back for cash if you’re not going to replace it.
Tyler Martin: So I think that’s the mindset when people think about lease that they’re stuck with it or they’re just gonna give it back and walk away at any time. You certainly, like you said, you can get out of it sooner.
31:58EVs, dash cameras and the WEX card for small fleets
Tyler Martin: You can hold onto it longer. It’s very, very flexible. And that’s what most people don’t realize.
Renee Milum: Yeah, that’s good stuff. Okay, last thing I want to talk about is kind of more looking ahead. Where do you think like with EV electric vehicles, where do they kind of fit into this? And what are your thoughts around that?
Tyler Martin: EVs are tough right now. They’re really all over the place, Tyler. Okay. Because the infrastructure just never got figured out. They were great for some companies that really have that dialed in route where, you know, it’s local and the driver’s not going to get stuck being able to charge somewhere.
Tyler Martin: or they can take it home and they can charge it. They have the access to charge it. But what’s going on is, so like companies like Ford, they’ve stopped making their electric vehicles. They’ve just lost too much money on them, right? But then you have a company like Ram,
Tyler Martin: they’re just coming out with their new electric vehicle this year, right? It’s gonna be available for ordering in the middle of 26 for a 27 model year. And Chevy still has theirs as well, but it’s just, it’s so up and down because we really, they just really haven’t got
Tyler Martin: the infrastructure for charging dialed in. And that takes a lot of time, right? To figure out, right? Is this the best route? Will this work? Will my driver get stuck? Will be able to get to all of his, you know, all of his jobs throughout the day. And then like, do they take it home and
Tyler Martin: charge it? Do you help pay for putting in that charger? Like there’s different chargers to choose some. Some are fast, some are slow. There’s just so many questions that haven’t been really
Renee Milum: figured out yet. So, yeah. Okay. And then what about AI and telematics? So maybe you could define telematics, but it’s, I believe this is around like predictive maintenance, stuff like that. Telematics is great. One thing I would say, if you’re not doing that, you should look at doing
Renee Milum: the next quarter is getting cameras in your vehicles. So many options for that. I mean, you can go all out and get, you know, a really robust system like Geotab and their cameras. It’s going to cost be very expensive. But like I said, it’s very robust.
Renee Milum: You might do that with a very large fleet or you can look at a sure cam option, which is more for a smaller fleet. But from a liability standpoint and an insurance standpoint, you should definitely be considering that over anything else if you’re going to add something to the fleet this year.
Tyler Martin: And when you say cameras, do you mean looking out or looking in?
Renee Milum: Both.
Tyler Martin: OK, that’s I thought you were going to say. Yeah, you can get cameras looking out at driver facing, rear facing. There’s all different options, but you should consider both.
Renee Milum: I had someone on my podcast and the name is skipping me who it was, but they were taking me through the process of adding the cameras and actually, well, looking out, but looking in too. And he was telling me something like in the first month, I forget, but it was like a
Renee Milum: thousand infractions were showing up or maybe it was the first week. It was like all kinds of stuff, people on YouTube, all just crazy stuff. And he said after like two or three weeks, it had dramatically gone down to the point where like, I guess this system would warn him when this stuff was happening.
Renee Milum: And he was like getting like one warning a week as opposed to like one every 15 minutes or something. And so it does make a huge difference. I mean, he did also say, because the thing I always ask is, well, culturally, how do you deal with that?
Renee Milum: Because I’m sure for some people, the people are going to push back if they’ve never had that before with the camera looking in on them. And he said, hey, it was tough, but at the end of the day, it’s what we needed to do.
Renee Milum: I mean, it had a big impact, I think, on his insurance. And then ultimately, over time, I believe he said it also just with things going weird as far as infractions and stuff of his drivers. It does help with, you know, with keeping drivers, I guess.
Renee Milum: That’s the word I’m looking for.
Tyler Martin: Accountable?
Renee Milum: Yeah. Yeah, that’s a good word. It does help that. But the way I always tell them to explain it is we’re doing this to keep you safe, really. Because like you said, if there is an accident, it’s all going to be caught on camera.
Renee Milum: And there’s none of this he said, she said, right? It’s all there. It’s black and white. It’s there to keep them safe. Yeah. That’s the way I’ve always said. That’s how you can kind of introduce it. And once they get used to it, they’re fine, right?
Renee Milum: And it does. It corrects some of their bad driving behaviors, which is what should be done anyway. But that’s how I always introduce it.
Tyler Martin: Yeah, that’s a good way of saying. That’s a good way of framing it. And then just on the AI front, what are you seeing in terms of what are you seeing just in terms of AI and how it’s being utilized as it relates to vehicle usage, fleet usage, stuff like that?
Renee Milum: Yeah, as I mentioned, like we’re using a lot to help us with, you know, right time to cycle that type of thing. I, you know, I see it. There’s lots of AIs out there. The companies are using it for answering phones and that type of thing.
Renee Milum: It hasn’t made that big of an impact into the actual fleet, like into the purchasing a vehicle or anything like that. It doesn’t mean that won’t change. But yeah, as for data and cycling and all that kind of information, we use that quite
Renee Milum: a bit.
Tyler Martin: Very cool. Okay. Before we wrap up here, last question. Your clients that you are most proud of that you go, oh man, you’re really doing the right things as it relates to your fleet. Can you give me a couple of bullet points of things that you see people, owners are
Renee Milum: doing really well with their fleet in terms of managing it? Yeah. So as I mentioned, if you have a fleet of 15 or more, you’re getting on the maintenance management program, you’re using a WEX fuel card, right? So now you got your mileage and your maintenance information together that
Renee Milum: will just help make things more proactive for you, keeping up on service when services due, allowing the driver to actually schedule service closer to them, right? Reducing downtime, that type of stuff. So they’re taking that to heart. And then, like I said, adding the cameras
Renee Milum: for that extra security. And then just, you know, when I say, hey, this is the lease term, this is the payment. Oh, well, that’s more than I thought it was going to be. We’re doing it based on your annual mileage. And you’re going to thank me when it’s time to sell the vehicle.
Renee Milum: You’re not going to owe us money. We’re going to be giving you equity back either to roll into a new vehicle, right? Or just take back as cash. So really listening to the fact that I’m doing it to keep them in an equity position so that instead of being upside down and negatively
Renee Milum: impacting their business, running a newer fleet, right? So it doesn’t negatively impact their
Tyler Martin: business. Yeah, that’s good stuff. What about for the smaller shop though, that maybe is under 15? Is there anything they could be doing? Obviously that management program they couldn’t be part of, but anything that might be different than someone with a larger fleet?
Renee Milum: I wouldn’t say different. I would always say, always get on a WEX card. It doesn’t matter what size your fleet is, right? Always be using that. That just protects the company. It protects the driver as well. Always use the gas card, no matter the size of fleet. And then, like I said,
Renee Milum: even if you only have three vehicles, getting those cameras in place is key.
Tyler Martin: Okay. That’s good stuff. That’s really good feedback. Okay. So Renee, can’t thank you enough for being part of the show. You’ve got a ton of knowledge in this space and it’s such an important topic. I was so excited when I got a chance to talk with you because I think it doesn’t get
Tyler Martin: talked about enough for such a big P&L line item, or just a cost, I should say. It just doesn’t get talked about enough. And I’m surprised because when, as you mentioned it as well, I mean,
Renee Milum: the vehicle is the third largest probably line item on the P&L. Right, right. Yeah, it’s crazy.
Tyler Martin: Okay, so your website, jumpsmart.com is your business website. And then I’ll throw your LinkedIn link into the show notes. And then you were cool with, can you okay if I share your email
Renee Milum: address that people want to reach out to you? Absolutely. Yeah. So it’s R-M-I-L-U-M, R-M-I-L-U-M, first initial, last name, at jumpspark.com. And people are welcome to reach
Tyler Martin: out to you if they have questions. Absolutely. Yep. Even if they go on the website, there is a submission, a lead form they can fill in. But there’s also my calendar links right there. They
Renee Milum: can book a meeting with me right through that based on their availability. Awesome. Well, It’s been great to have you on the show. I appreciate you sharing your knowledge. And maybe in the future, we can have you back and get the next latest trends in fleet management.
Tyler Martin: Having me, Tyler, I would love to do that. So I appreciate it.
Renee Milum: Okay, take care. Your fleet generates revenue. And if you’re not managing it that way, it can quietly cost your business a lot more than you think. A lot of owners look at a paid-off truck and assume it’s saving them money. But Renee made a great point.
Renee Milum: Once you factor in repairs, downtime, lost production, maintenance, and resale value, that no-payment truck may actually be one of the most expensive vehicles in your fleet. I also liked how she broke down leasing in a practical way. For commercial fleets, it’s not always about being locked into a payment.
Renee Milum: It can be about preserving cash, rolling in upfitting and wraps, timing replacements better, and keeping the business in a stronger financial position. The biggest lesson is stop making fleet decisions by default. Don’t wait until a truck dies. Don’t make decisions based only on the monthly payment.
Renee Milum: Look at the total cost of ownership, your cash flow, utilization, downtime, and replacement timing. And hey, if you’re currently trying to decide whether to buy new vehicles, keep the ones you have, or figure out when it’s time to replace part of your fleet,
Renee Milum: That’s exactly the type of things that I analyze with my current client base and I help business owners with. We can look at your numbers together and determine whether buying, leasing, holding, or selling makes the most sense for your business. Feel free to book a call at cfointrocall.com or learn more about my business at cfomadeeasy.com.
Renee Milum: But most importantly, thanks for listening and I’ll see you in the next episode.
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Tyler Martin works with owners on the numbers behind these stories: Profit & Grit CFOs. For where your business sits right now, read the $3M to $15M scaling breakdown.
