Transcription
VEHICLE PURCHASES Discussion of anticipated industry changesTips to make sure your appropriation goes the distance
Overview- Contracts DOP currently has statewide vehicle contracts with 6 dealers: MountainHome Auto Ranch, Smith Chevrolet, Goode Motor, Young, Kendall, Corwin,and Ron Sayer Dealers are awarded contracts for various manufacturers, vehicle types, and areaswithin the state, based on the ITB Manufacturers included: Ford, Chevy, Dodge-Ram, GMC Vehicle types included: cars, SUVs, pickup trucks, and SSVs
Overview- Contract Pricing Contract pricing has several components, and is determined as follows: Dealer Net Invoice Manufacturer’sDestination Charge Dealer’s Margin Additional options Manufacturer’sGovernment BidAssistance 1.25%Admin.FeeFinal Costto Agency Contract Pricing changes annually– manufacturer’s provide updated pricingfor each model year, which affects the dealer net invoice, destinationcharge, and bid assistance amounts.
Anticipated Changes in the Auto Industry Expect vehicle costs to increase as a result of new steel tariffs Several manufacturer’s will decrease or eliminate production of sedans.Here’s the latest information we have (not official): Ford will stop making sedans in 2020 (eliminates Fiesta, Focus, Fusion, Taurus)Chevy will only make the Malibu (eliminates Sonic, Cruz, Impala)
Managing Current Appropriations If you have a current appropriation to purchase vehicles, DOP and DFMstrongly encourage that you make your purchase SOON. Manufacturers set aside a specified number of vehicles to be sold asgovernment fleet; once sales approach that number, manufacturers willannounce a cutoff date to place orders for the current model year (MY18) With MY19 pricing expected to increase, it is important to place your vehicleorders prior to the MY18 cutoff dates to avoid having the vehicle costsexceed your appropriation/available funds.
Managing Budget Requests If you are planning to request funds for vehicles in your FY20 budget, beaware of some of these anticipated changes and plan accordingly DOP is working to get MY19 pricing to DFM so that FY20 budget requests reflect theexpected pricing increases If your FY20 budget includes appropriation for sedans, you will need to plan topurchase early in FY20, as we expect production of many models to cease (andproduction cutoffs may come early as other government agencies plan for the change)
Down the Road (pun intended) If manufacturers make the anticipated changes to their model offerings,DOP may go out for a supplemental bid to include additional makes/models If DOP does not issue a supplemental bid (or if there is a gap in coverage),agencies should be prepared to complete solicitations to purchase vehicletypes that are no longer available on the statewide contracts
QUESTIONS?
Overview- Contract Pricing Contract pricing has several components, and is determined as follows: Contract Pricing changes annually – manufacturer’s provide updated pricing for each model year, which affects the dealer net invoice, destination charge, and bid assistance amounts.
