When switching from leasing to purchasing is more effective

Back in the mid-2010s, the City of West Jordan, Utah, realized its police vehicles were in bad shape and began discussing ways to bring the fleet up to date while reducing repairs and downtime. It decided on leasing and began in 2015 with the first group of vehicles. However, a change in leadership brought about a cost/benefit analysis of leasing all these vehicles.

It decided on leasing and began in 2015 with the first group of vehicles. There were about 120 vehicles, marked and unmarked, divided over three years with three-year leases. The vehicles would be sold with all up fitted equipment still installed, except the radio and video equipment.

However, they decide to make a cost/benefit analysis of leasing all these vehicles.

Fleet data showed that unmarked vehicles could run for double the time the city had them, if not more; marked units could easily be kept for an additional year or two. However, since it was a three-year lease, which is less than the target life of the vehicles, they couldn’t be kept longer.

The Fleet Department found moving to a four- or even a five-year lease would save some money: the numbers showed a 32.75% savings in TCO. With lease payments per year reaching over $1.3M, that projected saving about $447K of that payment.

What the city found after taking a massive loss in remarketing that first year was it would strip the vehicles, replace any damaged interior panels, clean them, and then send them to auction. With the additional work and attention, it was able to take a gain instead of a loss.

Use your fleet’s telematics data to analyze and validate business expenses

Whether you have a trucking, delivery or commercial fleet, operating it is going to cost money. But like most businesses, you likely budget and forecast those expenses as a part of your standard operations.

By using fleet management software, you can now have connected vehicle data which in turn can help you calculate actual operating expenses which can then be compared to your budget. Comparing the numbers will help fleet managers determine areas where they can effectively cut costs, increase productivity, identify outlier expenses and eradicate them and achieve overall fleet savings. Telematics solution provides great insights into driver behavior and attitude. These insights help fleet managers observe driver performance. 

A fleet tracking device can also detect harsh use of the vehicle, which impacts its condition over time. Harsh braking can wear down brake pads, for example, reducing their life. By interceding with driver behavior, you can reduce bad habits that impact the life of certain parts and vehicle systems by replacing parts and providing service less frequently.

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