CAFM Asset Management 3 — Questions and Answers
Question 1: What is 'remarketing' in the context of fleet asset management?
- Advertising the fleet program internally to employees
- The process of selling or disposing of fleet vehicles at end of service (Correct answer)
- Negotiating new vehicle purchase contracts
- Rebranding company vehicles with new graphics
Correct answer: The process of selling or disposing of fleet vehicles at end of service
Remarketing encompasses all activities involved in selling or auctioning used fleet vehicles to maximize return at disposition.
Question 2: A fleet manager analyzing asset utilization discovers that 20% of vehicles are driven fewer than 5,000 miles per year. The FIRST recommended action is:
- Immediately sell all underutilized vehicles
- Investigate the business need and consider right-sizing the fleet (Correct answer)
- Increase maintenance intervals for those vehicles
- Reassign all low-mileage vehicles to high-mileage drivers
Correct answer: Investigate the business need and consider right-sizing the fleet
Before disposing of assets, a fleet manager should validate whether the low utilization reflects a legitimate operational need or true excess inventory.
Question 3: Which type of vehicle acquisition gives the fleet the most flexibility to return assets without a long-term financial obligation?
- Outright purchase
- Open-end lease
- Closed-end lease (Correct answer)
- Finance lease
Correct answer: Closed-end lease
A closed-end (operating) lease limits the fleet's financial exposure at lease end, as the lessor bears the residual value risk.
Question 4: Net book value (NBV) is calculated as:
- Purchase price minus accumulated depreciation (Correct answer)
- Market value plus outstanding loan balance
- Replacement cost minus insurance deductible
- Invoice price plus taxes and fees
Correct answer: Purchase price minus accumulated depreciation
NBV equals original cost minus all depreciation recorded to date, representing the asset's carrying value on the balance sheet.
Question 5: A fleet manager is evaluating whether to repair a vehicle with 180,000 miles or replace it. Which analysis tool is MOST relevant?
- Break-even analysis comparing repair cost vs. replacement TCO (Correct answer)
- Fuel economy comparison between the old and new vehicle
- Driver satisfaction survey
- Manufacturer warranty coverage review
Correct answer: Break-even analysis comparing repair cost vs. replacement TCO
Break-even analysis compares the cost to repair and continue operating versus acquiring a replacement, revealing the economically superior option.
Question 6: Which fleet management practice involves setting minimum and maximum vehicle inventory levels to optimize asset count?
- Fleet benchmarking
- Right-sizing (Correct answer)
- Asset tagging
- Lifecycle modeling
Correct answer: Right-sizing
Right-sizing aligns the number and type of vehicles to actual operational requirements, eliminating excess assets and filling genuine gaps.
Question 7: When a fleet vehicle is 'written off' after a total loss, which value is used to settle the insurance claim?
- Original purchase price
- Actual cash value (ACV) at the time of loss (Correct answer)
- Net book value on the balance sheet
- Manufacturer's suggested retail price
Correct answer: Actual cash value (ACV) at the time of loss
Insurance settlements for total losses are based on ACV — the fair market value of the vehicle immediately before the loss event.
CAFM Asset Management 3
What is 'remarketing' in the context of fleet asset management?