Valley Center officials weigh bringing vehicle fleet management in-house to cut finance costs

A city presentation on Nov. 18 outlined a plan to shift parts of Valley Center’s vehicle fleet program away from Enterprise Fleet Management toward in-house administration and direct purchases through local dealers and banks.

The presenter, addressed in the meeting as Clint, told the council that Enterprise-managed leases have embedded interest rates he calculated between about 9% and 15% and that those costs are “hidden inside the contract.” He said the city currently finances 29 vehicles through Enterprise and has begun analyzing whether breaking some contracts and refinancing with local lenders could save the city money.

Clint cited one real-world example: a replacement Chevrolet Tahoe quoted at $56,281 through a local dealer with a 4.5% financing option that he said produced a monthly payment he calculated as about $10.56 and an estimated per-vehicle savings of $11,088.66 over the Enterprise contract on that vehicle. He said Halsted Bank offered financing about 2.5% below the New York Prime benchmark, which recently stood near 7%, allowing lease-to-own financing around 4.5% in his example.

Clint said he reviewed all 29 Enterprise contracts, found the lowest contract rate was about 9% and the highest about 15%, and estimated that refinancing 18 vehicles could save roughly $188,600. He also noted each Enterprise contract carries a $400 lease-termination fee and said he has discussed buyout and refinancing mechanics with the city auditor, Sean Gordon, who told him a buyout and re-leasing or refinancing was feasible.

Council members asked about vendor selection, maintenance and software needs. Clint said the proposal does not require hiring a full-time mechanic because newer vehicles are under manufacturer warranties and routine maintenance could be handled through existing local shops or small maintenance-tracking software (he mentioned MyGeotab as an example priced roughly $20–$120 per vehicle per month). He also described outreach to local dealers; Don Hatton, a dealer contacted by staff, has asked only for first refusal on trade-in vehicles and no exclusive contract, according to the presenter.

Clint said the city has already completed one vehicle purchase under the new approach and expects two more within 60 days. He asked council members for feedback while staff completes a full analysis of the entire fleet and the legal review of lease buyouts.

Council members expressed support for the potential savings but pressed for competitive procurement and clarity about any exclusive arrangements with dealers. One council member asked whether the city should formally bid the work; Clint said the choice of a dealer was driven by the practical need to obtain both Ford and Chevrolet vehicles quickly and that multiple local vendors have been contacted.

The council took no formal action on the presentation itself; staff said they will return with a full analysis and any contract recommendations.