Vehicle Acquisition and Disposal

Sound decisions come from good intelligence and weighing a number of requisite factors

The critical element in optimizing fleet lifecycle costs is determining vehicle ownership economics and replacement intervals and methods. The process begins with vehicle selection and acquisition.

The foundation for that is identifying transportation and operational requirements, and then evaluating the best ways of meeting those essentials. Once acquired, the appropriate maintenance and servicing schedule for each vehicle needs to be developed and adhered to. Next comes development of an ongoing fleet replacement policy. This involves figuring out when, and how, to dispose of vehicles.

When vehicles are managed correctly, a fleet can benefit from savings through optimal lifecycle cost due to more efficient vehicle operation, reduced downtime, improved safety, greater driver satisfaction and higher resale and/or trade-in values.

To make sound vehicle acquisition decisions, a broad spectrum of information needs to be gathered and then weighed against a number of factors, according to the NAFA Fleet Management Association's Certified Automotive Fleet Manager Program (CAFM). These factors include being aware of the fleet's needs, goals, resources, working environment and management philosophy.

CAFM is the oldest and largest fleet certification program in the world. A not-for-profit, individual membership professional society, NAFA serves the needs of members who manage fleets of automobiles, SUVs, trucks, vans and a wide range of specialized mobile equipment for organizations across the globe.

Typically, three main steps ought to be followed when selecting vehicles, CAFM says. The first is to analyze the various transportation options to meet identified operational needs and requirements and to reduce the total transportation costs in the organization, including the cost of vehicle purchases, leases, short-term, rentals, etc.

Analysis of operational needs and requirements, says CAFM, should include such considerations as:

• Travel conditions - Will travel be mainly on well-maintained highways and city streets, or include gravel, dirt or country roads? Will there be mountains, severe cold, severe heat or high winds? Will other conditions necessitate special engine sizes, suspension systems, etc.?

• Driving patterns - Will most travel be on highways, in cities or mixed? Will most trips be long and at high speeds, or will the vehicle make frequent stops and cover a small territory? Will the vehicle cover such large distances that range per load of fuel is critical?

• Predicted mileage - How many miles will the vehicle travel each month?

• Fuel requirements - Will the vehicle operate in regions where alternative fuel requirements must be met? Is it necessary to acquire a dual-fuel or flexible-fuel capacity? Is a hybrid vehicle suitable?

• Special equipment - Does vehicle use require heavy duty electrical systems, special lighting, decals or trim to increase visibility or installation of other specialized equipment? Will cellular telephones, computers, facsimile machines or other equipment be installed or require special adaptations?

• Legal requirements - Be aware that law or regulation at a variety of government levels may require provision of cargo security, special lighting or other equipment.

Following this evaluation comes selecting the most beneficial vehicle to lease or purchase. This is achieved by analyzing and evaluating historical and anticipated future lifecycle data. This should include a cost comparison of fuel types for the expected fuel consumption; maintenance and repair data; anticipated resale values; and expected emission levels when compared to other vehicles in the same class.

The third step, says CAFM, is consideration of other elements that may influence the selection decision, including the importance the fleet places on various selection factors. These factors may include initial cost, depreciation/resale value, repair record, economy of operation, environmental impact, serviceability and maintainability, safety features, warranty program, vehicle availability (delivery time), country of manufacture, company image and public perception, driver preference and insurance costs.

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