Work truck replacement and procurement is a standard part of any fleet operation but with extended lead times and higher prices for both new and used vehicles, as well as upfits, these tasks can prove daunting.
Knowing the right time to replace a work truck is a critical part of maximizing its ROI. Fleets can put themselves in a better position for procurement using replacement estimates so new truck purchases can be started well in advance of when they’re needed, ensuring a more ideal delivery window.
There’s a lot that goes into vehicle replacement estimates. For fleets still manually recording asset data, it can be burdensome to track down inspection and maintenance histories and calculate asset lifetime costs to make sure they’re getting a fair resale value.
Using fleet management software (FMS), fleets can keep clean and easily accessible vehicle documentation, including service, inspection, and accident (if applicable) histories, insurance histories, and more. Having this documentation at the ready during the disposal process is especially advantageous when setting a sell price, as you have evidence that the truck is in safe operating condition and has been well maintained throughout its use.
From Acquisition to Replacement
No matter how you choose to record fleet data, manually or via FMS, when calculating optimal replacement windows there are certain lifetime data points to consider. These include:
● Purchase price
● Expected amount of time the truck is intended to be in service
● Estimated annual usage/mileage
● Estimated fuel efficiency (this can be based on OEM specifications or fuel history data)
● Estimated salvage value (the percentage of return expected when selling compared to purchase price)
● Estimated service costs over the truck’s projected lifetime based on historic service and PM schedules
● Estimated fuel costs over the truck’s projected lifetime based on historic fuel data
The more accurate your estimates are for these data points, the more precise your optimal replacement window will be. Using FMS to track and monitor fleet data takes the guesswork out of these calculations by collecting, consolidating, and aggregating fleet data and automatically calculating a replacement analysis for you.
With an approximate replacement window, you can create a strategic procurement and disposal plan, ensuring a more seamless transition from old to new without incurring unnecessary downtime. And because used vehicle costs are increasing due to low stock, a properly maintained truck can prove quite valuable, especially when you have the service records to back it up. Reselling or auctioning a fleet truck can also help to pad the cost of future acquisitions, so you’re not only maximizing ROI, you’re feeding money back into your procurement budget.