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Selection of Vehicles
The selection of vehicles is the most important area of fleet management because it has a direct effect on the individual and the ultimate operating costs (c/km) of the vehicle.

Companies usually select vehicles based on the purchase price and discount. Escalating operating costs and regular price increases indicate that this not the correct method. ALL of the operating costs must be considered when selecting vehicles.

In the selection process, it is incorrect to keep the purchase price and resale values apart because of inherent accounting systems. The market related depreciation is usually the fleet's highest cost. It must be controlled effectively and it is one of the most important factors in vehicle selection. It is not correct to compare market related resale values to annual tax depreciation rates.

Vehicle selection criteria should be developed for the various fleet operations. These should be guidelines and any deviations should have to be justified. It is a sound idea to develop appropriate selection or spec forms for the different vehicles required by the company.

The basic criteria for selection is given below.

1. ECONOMY - These factors affect the c/km operating costs.

• Capital cost: The price affects the final depreciation costs i.e. the higher the price, the higher the cost of total depreciation in rand terms.
• Residual value: By choosing popular vehicles, you can ensure that you will achieve good residual values.
• Service availability: The manufacturer should have a good dealer network and maintenance plan to help control costs.
• Tyre costs: As tyre prices increase, they impact more on operating costs.
• Fuel costs: This is about 60% of variable costs. Always check stated fuel consumption.
• Insurance: The type of insurance affects operating costs.
• Maintenance costs: Vary considerably. The current, built-in manufacturer maintenance plans control these costs.

The following points also need to be considered:

• RELIABILITY - Breakdowns result in higher cost to the company. .
• IMAGE - Corporate ID'S are important.
• REWARDS AND MOTIVATION - Sometimes a factor.
• UTILITY - Size related to usage.
• BODY TYPE - Can affect resale value and usage.
• TRANSMISSION - Depending on application (town versus country)
• ACCESSORIES - Lay down the guidelines.

If selection is correctly based on total c/km operating costs, it is essential for the expense control system to record and report these operating costs. This feedback is invaluable to help control and refine the selection process. USE OUR C/KMS CALCULATORS TO DO THESE CALCULATIONS.

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