Business Accounting Considerations For Fleet Vehicle Acquisition
Any CFO knows that when the company is acquiring new vehicles for its fleet there are many things to consider. Buying a certain type of vehicle just because it has better gas mileage over another type of vehicle is the wrong way to look at the decision choice. The decision is much more complex than that.
Yes, it's true that currently the fuel prices are quite high and that is a big expense on the company's operating costs, however a CFO should look at preventive maintenance costs, which are required on a routine schedule. Anytime you take a vehicle out of service for preventive maintenance this creates downtime and the more vehicles that are down at any given time means that you need to add vehicles to your fleet to have the standard number of vehicles operating at all times.
More vehicles means more costs, and the cost of each vehicle may be more than the total fuel usage of all the vehicles at a single location for a period of time. Of course, this is not the only consideration, what about such things and leasing plans, insurance, driver safety? One hurt employee on the job could render huge legal costs, lost labor, lost productivity and bad PR.
Speaking of PR, what about signage issues? Some vehicles lend themselves well to signage, and vehicle signage is about the cheapest form of advertising and the vehicles are driving around all day and being seen. What it that realistically worth? Lots, especially to the company's brand name, so Size and Shape does matter!
Resale value is another huge consideration, will the company dump the vehicles at auction or will they trade them in on a standard lease. Lastly, one thing I always worried about was if the drivers would like the vehicles? If they do, they will take care of them and if not they will trash them, shortening their useful life. Please consider all this.