You should be considering a lot more than just the age of your vehicles when you’re considering replacing them with newer vehicles.
Mike Hamilton, CTP, Senior Vice President of Financial Services for AmeriQuest Transportation Services, recently posted a blog on Monitor Daily entitled “Age: It’s More than a Number in Fleet Financing.” In this informative piece, Mike talked about the error that fleets may make by simply retiring trucks based on a traditional life cycle. Instead, he suggests that companies can maximize profitability by having the right mix of trucks in operation. This would include the right trucks for the application as well as trucks of the proper age.
Instead of using a set trade cycle, Mike informs fleet owners that they need to assess each truck individually for a number of factors besides age; factors such as fuel efficiency, maintenance costs, and downtime. He also recommends that you consider the value of that truck in the secondary market. And he would urge fleet owners to reevaluate their fleet age on a quarterly rather than annual basis. That will allow fast up and down fluctuations in fuel prices to be figured into the equation. Having the right data may enable fleet owners to either keep certain vehicles longer than the trade cycle or to trade them earlier.
Mike relates true stories of fleets that have millions of dollars in savings by using more than age to assess their fleet financing needs.