Volvo Flexi-Gold Contract – the usage-based service contract for hauliers who need more flexibility10/17/19 2 min read 2 min read
Volvo Trucks’ new Flexi-Gold contract offers the security of a long-term contract but with the flexibility to continuously match maintenance and costs to usage.
Many transport companies operate in increasingly unpredictable and fluctuating markets, yet service contracts require stability and long-term planning. This is a contradiction but one that the Volvo Flexi-Gold Contract resolves.
“On my first day working in this field, I could see that the traditional service contract could be perceived as rigid and static,” explains Thomas Niemeijer, Business Development Manager, Service Contracts, who co-developed the Flexi-Gold concept.
Flexi-Gold offers the same coverage and uptime as a Gold Contract, at comparable cost, but with much greater flexibility to adapt to changing business needs.
“You have to know how much you will drive every year, over four to seven years, and few people in our industry can predict this so far in advance. So we started to investigate how we could develop an offer that would give customers more flexibility over the duration of a long-term contract.”
With the Volvo Flexi-Gold Contract, the customer has a 40 per cent flexibility span, where annual mileage can exceed and surpass their agreed mileage by 20 per cent both ways. Each month, the customer’s invoice is set according to how far their vehicle has driven. “Quite simply, if you drive less, you pay less and vice versa,” explains Thomas Niemeijer. “Flexi-Gold offers the same coverage and uptime as a Gold Contract, at comparable cost, but with much greater flexibility to adapt to changing business needs."
The new usage-based service contract is made possible by advances in connectivity and telematics, which enable vehicles to share real-time mileage with Volvo Trucks. “There are three trends that have combined to really drive this concept,” adds Thomas Niemeijer. “There is a clear customer need for greater flexibility, which is growing and an increased willingness to change business models and do things differently. We also have the technology to make usage-based service contracts possible.”
The Volvo Flexi-Gold Contract is available in selected European markets and will be gradually rolled out into new markets in the near future.
Six benefits of the Volvo Flexi-Gold Contract
1. Allows flexibility
Even if you only have short-term agreements with your clients or operate in an increasingly unpredictable and uncertain market, the Volvo Flexi-Gold Contract can continuously adapt to meet your needs while providing the security of a long-term contract.
2. Aligns with your cash flow
As invoices are based on your actual driving, this limits your financial exposure. This is particularly useful for customers working with seasonal changes and fluctuating demand.
3. Usage based
Pay for what you need – no more, no less. Every invoice is based on the driving for that month, while the maintenance schedule is continuously adapted to match the mileage and offer the optimal level of care.
4. Peace of mind
As with the Volvo Gold Contract, Flexi-Gold secures the highest possible uptime. With no unexpected repair bills to worry about, customers can focus on their business.
5. Lower total cost of ownership
The flexibility makes it easier to commit to a long-term contract and by extension benefit from reduced total cost of ownership that comes with all service contracts.
6. Reduces paperwork
All invoices are calculated automatically, with no additional invoices for exceeding mileage. The customer can drive freely within the agreed 40 per cent flexibility span and no additional administration and time is required.