CAFM Vehicle Acquisition & Disposal 5 — Questions and Answers
Question 1: A fleet manager wants to reduce acquisition cycle time. Which strategy is most effective?
- Waiting for end-of-year clearance sales
- Establishing annual blanket purchase orders with approved vendors (Correct answer)
- Requiring individual bids for every vehicle purchase
- Delaying orders until after budget approval each quarter
Correct answer: Establishing annual blanket purchase orders with approved vendors
Blanket purchase orders with pre-approved vendors eliminate repetitive bidding, significantly shortening the time from need identification to vehicle delivery.
Question 2: What does 'upfitting' refer to in fleet vehicle acquisition?
- Increasing a vehicle's resale price post-sale
- Adding specialized equipment or modifications to a vehicle after factory production (Correct answer)
- Negotiating a higher trade-in value
- Registering the vehicle in a preferred state
Correct answer: Adding specialized equipment or modifications to a vehicle after factory production
Upfitting involves adding work-specific equipment such as shelving, lighting bars, or utility bodies after the base vehicle is manufactured.
Question 3: Which financial ratio best measures how efficiently fleet assets (vehicles) are being utilized?
- Debt-to-equity ratio
- Vehicle utilization rate (miles driven vs. available capacity) (Correct answer)
- Accounts payable turnover
- Gross profit margin
Correct answer: Vehicle utilization rate (miles driven vs. available capacity)
Vehicle utilization rate measures how much of a vehicle's capacity is actually used, helping identify underutilized assets that should be disposed of.
Question 4: When a fleet vehicle is sold to an employee, what is the main legal requirement the fleet manager must fulfill?
- Issuing a new insurance policy
- Properly transferring the title to the employee (Correct answer)
- Providing a factory warranty extension
- Notifying the state DMV of the sale price
Correct answer: Properly transferring the title to the employee
Title transfer is a legal requirement for any vehicle sale, including employee sales, to officially record the change of ownership.
Question 5: A fleet manager is concerned about vehicle delivery delays. Which acquisition approach provides the most flexibility in delivery timing?
- Factory order with custom specifications
- Stock order from dealer inventory (Correct answer)
- International import order
- Government surplus reallocation
Correct answer: Stock order from dealer inventory
Ordering from existing dealer stock eliminates the factory build queue, typically resulting in much faster delivery than factory orders.
Question 6: What is the role of a fleet management company (FMC) in the acquisition and disposal process?
- Setting state vehicle registration fees
- Providing outsourced procurement, titling, registration, and remarketing services (Correct answer)
- Manufacturing fleet vehicles to fleet specifications
- Issuing commercial driver's licenses to fleet drivers
Correct answer: Providing outsourced procurement, titling, registration, and remarketing services
FMCs act as third-party administrators that handle procurement, financing, titling, and disposal on behalf of the fleet client.
Question 7: Which factor most significantly affects a used fleet vehicle's auction resale value?
- The fleet manager's tenure
- Mileage and vehicle condition at time of sale (Correct answer)
- Number of drivers assigned to the vehicle
- The original purchase financing method
Correct answer: Mileage and vehicle condition at time of sale
Mileage and physical/mechanical condition are the primary drivers of auction value, as buyers price risk based on how much useful life remains.
CAFM Vehicle Acquisition & Disposal 5
A fleet manager wants to reduce acquisition cycle time.
Which strategy is most effective?