A Run Cost Analysis Can Clearly Show if it's Time to Replace an Existing Asset with a New Asset
Posted: Dec 14, 2013
1888 Press Release - In an AmeriQuest Transportation Services blog, financial services expert Patrick Gaskins explains how a Run Cost Analysis, when executed properly, can help a fleet owner make the decision of whether to hold onto or replace that dependable, late-model vehicle.
CHERRY HILL, NJ - Is it always the most cost-effective decision to hold on to a dependable, three-year-old Class 8 truck in today's transportation environment? The answer may be no. But the only way to get a data-driven answer to the question is through a detailed Run Cost Analysis, says AmeriQuest Transportation Services Vice President of Financial Services in a blog posting.
Patrick Gaskins explains that a Run Cost Analysis can give a fleet owner the information necessary to determine the optimum replacement point for their assets. "Making the decision to replace existing vehicles for new requires precise calculations and research," he writes. "In today's marketplace, fuel economy plays the biggest role when determining whether it makes financial sense to purchase a new asset."
Gaskins' blog covers the process of fact finding, which begins with a study of fixed ownership or lease costs, their associated tax benefits, and the current used truck market.
The next step is identifying variable costs, such as maintenance and repair costs, breakdowns, and fuel costs. Both fixed and variable costs are then combined and divided by the number of miles the vehicle runs each year yielding the "total" CPM (cost per mile) for the asset.
Gaskins points out that finding the costs of an existing tractor is fairly simple but it's much more challenging to come up with the variable costs of a new vehicle. This is where he and his team of highly trained fleet professionals, utilizing millions of miles of data gathered over many years, can develop benchmark data that will project the costs of the new asset.
The blog goes on to explain how this can be done and gives real-world examples of how just a few tenths of a mile per gallon increase in fuel efficiency can reap tremendous benefits to a fleet's bottom line. To view the entire blog - part I of a two-part series - go to http://blog.ameriquestcorp.com/run-cost-analysis-time-to-upgrade/.
About AmeriQuest Transportation Services
AmeriQuest, headquartered in Cherry Hill, NJ, is a leading provider of comprehensive fleet management services. By leveraging the strength of more than 700,000 vehicles, AmeriQuest delivers savings, expertise, and opportunities to its private fleet and truckload carrier members. AmeriQuest provides supply management services, asset management services, material handling services, financing, technology products, and outsourced transportation management services such as full service leasing, integrated logistics, and contract maintenance. More information can be found at http://www.ameriquestcorp.com/transportation.
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