CAFM Vehicle Acquisition & Disposal 3 — Questions and Answers
Question 1: A fleet manager is comparing total cost of ownership (TCO) for two vehicles. Which cost is most commonly EXCLUDED from a simple purchase price comparison but included in TCO?
- Vehicle MSRP
- Dealer invoice price
- Fuel and maintenance costs over the life cycle (Correct answer)
- Sales tax at purchase
Correct answer: Fuel and maintenance costs over the life cycle
TCO incorporates all lifetime costs including fuel, maintenance, insurance, and depreciation, not just the initial purchase price.
Question 2: Which type of auction gives fleet managers access to the largest volume of wholesale buyers and fastest vehicle liquidation?
- Physical dealer-only auction
- Online fleet/lease auction (Correct answer)
- Government surplus auction
- Private treaty sale
Correct answer: Online fleet/lease auction
Online fleet/lease auctions attract large numbers of wholesale buyers nationwide, enabling faster and broader liquidation.
Question 3: What is 'remarketing' in the context of fleet vehicle disposal?
- Re-registering a vehicle in a new state
- The process of selling used fleet vehicles to maximize return (Correct answer)
- Applying new graphics to a vehicle
- Scheduling a vehicle for a second inspection
Correct answer: The process of selling used fleet vehicles to maximize return
Remarketing refers to the strategic process of preparing and selling used fleet vehicles through optimal channels to maximize residual value.
Question 4: A fleet manager notices vehicles are being kept beyond their optimal replacement cycle. What is the primary financial risk?
- Lower insurance premiums
- Reduced depreciation expense
- Escalating maintenance costs exceeding replacement savings (Correct answer)
- Improved resale values
Correct answer: Escalating maintenance costs exceeding replacement savings
Keeping vehicles past their optimal replacement point typically leads to sharply rising maintenance costs that outweigh any savings from deferring acquisition.
Question 5: Which metric is most useful for determining the optimal vehicle replacement point from a cost perspective?
- Vehicle color and brand preference
- Lowest point on the total cost per mile curve (Correct answer)
- Driver satisfaction score
- Number of accidents per vehicle
Correct answer: Lowest point on the total cost per mile curve
The optimal replacement point is typically where the total cost per mile (depreciation + operating costs) reaches its lowest value.
Question 6: What is a 'fleet pool vehicle' in the context of acquisition planning?
- A vehicle reserved exclusively for executive use
- A shared vehicle available to multiple employees as needed (Correct answer)
- A vehicle purchased through a cooperative buying group
- A vehicle used only for driver training
Correct answer: A shared vehicle available to multiple employees as needed
Fleet pool vehicles are shared assets not assigned to one individual, maximizing utilization across multiple users or departments.
Question 7: When issuing a Request for Proposal (RFP) for vehicle acquisition, which element is critical to include to ensure comparable bids?
- Preferred dealer color choices
- Detailed vehicle specifications and evaluation criteria (Correct answer)
- Driver names and license numbers
- Historical fuel prices only
Correct answer: Detailed vehicle specifications and evaluation criteria
Clear specifications and evaluation criteria ensure all vendors bid on identical requirements, enabling an apples-to-apples comparison.
CAFM Vehicle Acquisition & Disposal 3
A fleet manager is comparing total cost of ownership (TCO) for two vehicles.
Which cost is most commonly EXCLUDED from a simple purchase price comparison but included in TCO?