Fleet & Plant Management

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Light Vehicle Disposal

  • 1.  Light Vehicle Disposal

    Posted 03-07-2012 10:09
    RRC has been extending out lives to spread the higher depreciation over a longer period.  Ownership periods of 4-5 years is average given warranties these days.  It is thought that generally all residuals are suffering due to cheaper new alternate models and this is not going away.  In the end, models, equip levels, refit costs, etc all feed into whole of life cost (&FBT) so this should be your driver for ownership periods, and there is a significant body of evidence to suggest the 4-5 yr is best.

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    Michael Borg
    Operations Manager, Fleet Services
    Rockhampton Regional Council
    ROCKHAMPTON QLD

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    Komatsu


  • 2.  RE:Light Vehicle Disposal

    Posted 04-07-2012 15:26

    Michael is spot on with his response. Residuals are suffering across the board due to the proliferation of choice and the increasing acceptance of cheaper imports. There is no doubt the industry is suffering and manufacturers are heavily discounting. This has a roll on affect for residuals. Add to this the growing public dislike of 6 cyl vehicles and it starts to look like the perfect storm.

    Retention periods are trending higher which flattens out the depreciation and reduces the whole of life costs.

    Alternative disposal methods may provide a short term blip on the graph but I'd be doubtful if it was a long term solution. Some of these options may very well end up classing the Council as being a vehicle trader which in Victoria requires an LMCT certification. Generally it all comes back to the total cost of the original vehicle selection which should have been visible through the WOL analysis. Get that part reasonably correct at the start and there are no surprises at the end.

     That doesn't help to dispose of the RAV.
    I have used Grays on Line for the disposal of some small or obsolete plant, with some good results. Not sure about vehicles or larger plant. The advantage with something like Grays, Pickles or Manheim is that it is a public auction process and satisfies the requirements of auditors and Acts. Not sure if the eBay option would pass muster (in Vic anyway). Always happy to hear others thoughts.



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    Pat Ahern
    Manager Corporate Operations
    Swan Hill Rural City Council
    SWAN HILL VIC

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    Komatsu


  • 3.  RE:Light Vehicle Disposal

    Posted 05-07-2012 11:37
    Hi

    I responded directly previously but I wanted to put it out there:

    We sometimes use Ebay for disposal of items of relatively low value. We have been using Ebay for about 12 months.  Council recently sold 420 PC's through Ebay over several months.  We picked up 30k or so which made it a good result, as in the past the result through auction had been a net loss.

    In the past I have used Car Sales, however it needs a documented procedure to go with it.

    On vehicle retenton,  I note the UNIQCO recommendations which I think were 4 cyl 80k/3 years, 6cyl and light commercials 120k and 5 years.  Many Council's in NSW (which are generally cash strapped due to rate pegging) have been operating with similar or longer rention periods to the UNIQCO recommendations for a some time.  As Pat suggested, whatever you do should be based on WOL costs.

    My 20 cents worth on light fleet management is to be as flexible as possible and buy wherever you get the best deal, which in most cases will include a trade in.

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    Gerrard Milham
    Procurement Advisor
    Greater Shepparton City Council
    SHEPPARTON VIC

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    Komatsu


  • 4.  RE:Light Vehicle Disposal

    Posted 09-07-2012 08:42
    Thanks to all that have replied to this discussion.

    As I had expected we are all facing the same issues across the board with our Light Fleet. Previously we had been operating our passenger fleet on 3yrs or 80,000klms whichever came first and our commercial fleet on 4yrs of 100,000klms.

    We exclusively buy turbo diesel vehicles in our commercial fleet with the intention of the longer retention period and better resale at the end. This appears to be bearing fruit (if minimising loss is considered fruity)

    I have noted an increase in the amount of kilometres our employees are doing. This appears to be a direct result of an increased number of privately leased vehicles across the Fleet. As such I have reviewed our changeover criteria and am now operating on a flat 3 and 4 year retention. As per any change I expect to see positive and negative results on each individual vehicle.

    One example that I can provide is a Santa Fe in our fleet is currently doing 76797 kilometres per year. Obviously this vehicle will have approximately 230391 kilometres showing after the 3 year and as such I would expect minimal resale value. We are able to accept this minimised resale as we have saved 2 full changeovers or approximately $35,000klms........ the cost of a new Santa Fe.

    With the changes to FBT, lost residuals and excessive lead time on fleet delivery, It keeps the job interesting :-)
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    Adam Mills
    Light Fleet Co-ordinator
    Goulburn Mulwaree Council
    GOULBURN DC NSW

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    Komatsu


  • 5.  RE: Light Vehicle Disposal

    Posted 19 days ago
    Hi All,
    For those of you that are aware of IntelliTrac GPS Tracking https://intellitrac.com.au
    We have added many modules to the telematics platform over the years.

    In 2008 we began developing a vehicle disposal platform and it was released in 2019.

    Information is available at https://autotradeonly.com.au

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    Dean Calapai
    IntelliTrac
    Bundoora
    Australia
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    Komatsu