CAFM Asset Management 5 — Questions and Answers
Question 1: Which disposal channel typically yields the highest net return for a fleet selling a large volume of used vehicles?
- Donating to charity for a tax write-off
- Wholesale auction with no floor price
- Retail sale through a dealer consignment program
- Sealed-bid sale with a reserve price to qualified buyers (Correct answer)
Correct answer: Sealed-bid sale with a reserve price to qualified buyers
A sealed-bid sale with a reserve price attracts competitive offers while protecting against below-market results, often outperforming open auction for high-volume disposals.
Question 2: A fleet manager is preparing a business case to replace aging vehicles. Which financial metric demonstrates the annual cost burden of the current aging fleet?
- Vehicle color and make distribution
- Average cost per mile including maintenance, fuel, and downtime (Correct answer)
- Number of registered vehicles by state
- Driver tenure with the organization
Correct answer: Average cost per mile including maintenance, fuel, and downtime
Cost per mile consolidates fuel, maintenance, and downtime expenses into a single comparable metric that exposes the financial burden of aging assets.
Question 3: Under an open-end lease structure, who bears the residual value risk at lease termination?
- The vehicle manufacturer
- The lessee (fleet operator) (Correct answer)
- The lessor (leasing company)
- The insurance carrier
Correct answer: The lessee (fleet operator)
In an open-end lease, the fleet (lessee) is responsible for any shortfall if the vehicle sells for less than the guaranteed residual value.
Question 4: A fleet manager sets a policy to replace vehicles at 60 months or 100,000 miles, whichever comes FIRST. This is an example of:
- Reactive asset replacement
- Dual-trigger replacement criteria (Correct answer)
- Capital budget override
- Salvage value scheduling
Correct answer: Dual-trigger replacement criteria
Dual-trigger replacement criteria establish two independent thresholds — time and usage — so the vehicle is cycled when either limit is reached.
Question 5: Which of the following BEST describes the role of telematics data in asset management?
- It replaces the need for physical vehicle inspections entirely
- It provides real-time and historical usage data to inform utilization and maintenance decisions (Correct answer)
- It automatically transfers vehicle titles at disposition
- It eliminates the need for a fleet management information system
Correct answer: It provides real-time and historical usage data to inform utilization and maintenance decisions
Telematics captures mileage, engine hours, idle time, and fault codes, giving fleet managers data-driven insight into utilization and asset condition.
Question 6: A fleet department must reduce its asset base by 15% due to budget cuts. Which step should come FIRST?
- Immediately auction the 15% oldest vehicles
- Analyze utilization data to identify the least-used and highest-cost assets (Correct answer)
- Reduce all drivers' mileage allowances
- Switch all vehicles to personal vehicle reimbursement
Correct answer: Analyze utilization data to identify the least-used and highest-cost assets
Data-driven utilization analysis ensures the right vehicles are targeted for disposal rather than making arbitrary cuts based solely on age or cost.
Question 7: Which term describes the practice of using one common vehicle model across multiple departments to simplify parts inventory and maintenance training?
- Fleet standardization (Correct answer)
- Vehicle pooling
- Shared mobility
- Asset consolidation
Correct answer: Fleet standardization
Fleet standardization reduces complexity by limiting the number of makes and models, lowering parts inventory needs and streamlining technician training.
CAFM Asset Management 5
Which disposal channel typically yields the highest net return for a fleet selling a large volume of used vehicles?