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Open Calculation

A specialized form of leasing wherein some or all fleet costs are estimated in advance, then budgeted and billed by the fleet management company with periodic invoices (usually monthly). At the end of a certain period, for example once a year, for all vehicles which came out of service during the defined period, actual costs incurred over the lives of all vehicles in the group are compared to costs budgeted, and the differences are identified. 

Usually, these agreements call for most, if not all, of any savings between actual and budgeted expenses for the aggregate of vehicles analyzed to be returned to the customer, and most, if not all, of any cost over-runs to be borne by the leasing company or fleet management services supplier.

Open calculation is offered in most Western European countries where leasing is relatively sophisticated, notably the Benelux, German, France, and the UK. Open calculation is sometimes used not only for operating costs such as maintenance, but for many expense aspects, both fixed (for example, depreciation and financing) and variable (maintenance and tires).

Open calculation agreements include various qualifications or restrictions concerning mileage and vehicle utilization, plus detailed procedures for calculating variances between budgeted and actual costs.

In many instances the Open calculation provisions will only apply to a fleet providing that there is a minimum number of vehicles in that fleet. For example, to have the opportunity for an Open Calculation credit a fleet might be required to have at least 20 vehicles in each country to be eligiblc for a credit—if the calculations showed a favorable relationship between projected and actual aggregate costs.

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