Purchasing/Commissioning New Vehicles

Department: Tool Department 

Topic: Company Vehicles 

Process: Purchasing/Commissioning New Vehicles 

Objective 

This outlines the steps and guidelines from purchasing or commissioning new vehicles. This ensures a consistent, transparent, and efficient process for acquiring vehicles that meet the company’s operational and budgetary needs.  

Things to Consider 

When buying a new company vehicle, key consideration include: the intended use of the vehicles (local deliveries, long-distance travel), required cargo space, fuel efficiency, maintenance costs, insurance premiums, potential tax benefits, branding opportunities, and whether to lease or buy outright all while setting a realistic budget based on your business needs.  

Purchasing/Commissioning New Vehicles 

• Assessment of Need 

• Identify Requirements: 

• The Tool Department assess the need for new vehicles. Consider action such as the number of vehicles required, purpose of the vehicles (transportation, delivery). 

• Create Vehicle Specification: 

• Define specifications including vehicle make/model, features, safety standards, fuel efficiency, and any other accessory requirements. 

• Approval: 

• The Tool Manager will submit a request for approval to the Finance Department. 

• Budget Approval 

• Prepare Budget Proposal: 

• The Tool Manager prepares a budget proposal based on the estimated cost of the vehicles, including taxes, fees, accessories, and delivery charges.  

• Finance Department Review: 

• The Finance Department reviews and approves the budget, ensuring it aligns with the company’s financial standing and priorities. 

• Vendor Selection and Purchase 

• Obtain Quotes: 

• The Tool Manager solicits quotes from at least three approved vehicle vendors/dealers. Ensure each vendor provides a detailed breakdown of the cost, delivery timeline, warranty, and after-sales services. 

• Evaluate Proposals: 

• The Tool Manager and Finance Department evaluate the proposals based on price, specifications, vendors reputation, and after-sales service. 

• Negotiate Terms: 

• Negotiate with the selected vendors to finalize the best price, delivery schedule, and warranty terms. Negotiate any customization or additional services (fleet maintenance contracts). 

• Final Approval: 

• Once the terms are agreed upon, the Tool Manager secures final approval from the Finance Department. 

• Place Order: 

• The Tool Manager issues a purchase order and coordinates with the vendor to arranger payment and deliver.  

• Vehicle Commissioning and Registration 

• Inspection and Acceptance: 

• Upon delivery, the Tool Manager inspects the vehicles(s) to ensure compliance with specifications (make, model, custom features). A formal acceptance report is created.  

• Vehicle Registration: 

• The Tool Manager or assigned individual registers the vehicle with the relevant transportation authority, ensuring compliance with licensing, insurance, and registration regulations.  

• Insurance Coverage: 

• The Tool Manager ensures that the vehicles are covered by appropriate insurance policies, including liability, collision, and comprehensive coverage, as per company guidelines.  

• Vehicle Tracking & Documentation: 

• Install tracking devices if required (GPS, Fleet monitoring) and maintain up-to-date records for each vehicle (registration, insurance, maintenance history). 

• Vehicle Deployment 

• Assign the vehicle(s) to the relevant department, team, or employee. Provide the necessary training or orientation on vehicle usage, safety protocols, and maintenance procedures.  

• Ongoing Management and Maintenance 

• Regular Maintenance: 

• The Equipment Administrator sets up a maintenance schedule to ensure the vehicles are serviced regularly in line with manufacturer recommendations.  

• Fuel and Operating Cost: 

• Track fuel consumption, maintenance costs, and overall operational expenses related to the vehicle(s). 

• Performance Review: 

• Regularly assess the performance and condition of the vehicles to determine if any replacements or upgrades are needed.  

• End-of-Life Vehicle Disposal: 

• When vehicle reaches its end of life or is no longer economically viable, the Tool Manager arranges for its disposal, either through resale, auction, or donation, in accordance with company policy.  

• Compliance and Documentation 

• Regulatory Compliance: 

• Ensure the entire process complies with relevant local, state, and federal laws regarding vehicle emissions, safety, and tax obligations. 

• Record Keeping: 

• Maintain comprehensive records of each vehicle purchase, including purchase agreements, maintenance logs, insurance policies, and legal documents.  

• Performance Monitoring and Reporting 

• The Tool/Equipment Department will prepare an annual report to track fleet performance, cost, and any issues or improvement needed. This report should be submitted to the Financial Department.