Practice Test GeeksCAFM - Certified Automotive Fleet Manager Practice Test
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Fleet Financial Management Flashcards

7 cards from real CAFM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Fleet Financial Management flashcards as text

  1. A fleet manager discovers that a preventive maintenance program reduced unplanned repair costs by $120,000 annually but cost $45,000 to implement. What is the net annual financial benefit?

    Answer: $75,000

    Net benefit = Savings − Program cost = $120,000 − $45,000 = $75,000 annually.

  2. Which financial statement would a fleet manager primarily use to assess whether the fleet operation has sufficient cash to cover upcoming lease payments and maintenance obligations?

    Answer: Statement of cash flows

    The statement of cash flows shows actual cash inflows and outflows, making it the best tool for evaluating liquidity and ability to meet near-term obligations.

  3. When fleet vehicles are used for both business and personal purposes, what is the fleet manager's primary tax compliance responsibility?

    Answer: Tracking and reporting the personal use portion as a taxable fringe benefit

    IRS rules require that personal use of company vehicles be valued and reported as a taxable fringe benefit on the employee's W-2.

  4. A fleet manager is building a business case to right-size the fleet by eliminating underutilized vehicles. The most compelling financial metric to present is:

    Answer: Annual fixed cost savings per eliminated vehicle

    Quantifying the fixed costs (depreciation, insurance, registration) eliminated per removed vehicle directly demonstrates the financial impact of right-sizing.

  5. Under a closed-end fleet lease, the lessee's financial exposure at lease termination is primarily limited to:

    Answer: Excess mileage and damage charges beyond normal wear

    In a closed-end lease, the lessor bears the residual value risk; the lessee is only responsible for excess miles driven and damage beyond normal wear and tear.

  6. A fleet manager wants to benchmark fleet costs against industry peers. Which organization publishes widely recognized fleet cost benchmarking data in the U.S.?

    Answer: NAFA Fleet Management Association

    NAFA Fleet Management Association publishes industry benchmarking studies and cost data specifically designed for fleet managers to compare their performance against peers.

  7. A fleet manager is evaluating fuel card programs. Beyond convenience, the primary financial benefit of a centralized fuel card program is:

    Answer: Providing detailed transaction data for cost control and fraud detection

    Fuel cards generate itemized transaction data (driver, vehicle, gallons, location) that enables cost analysis, exception reporting, and fraud identification.