Wheels, Inc. announced on Oct. 27, 2003, the availability of its first-in-the-industry Vehicle Replacement Optimization application. The automated tool takes a unique approach to the replacement cycle by analyzing vehicles on an individual basis. Depending on fleet size, replacing a vehicle at the wrong time can cost over a thousand dollars per vehicle in depreciation costs.
“Historically, fleet management companies make the generic recommendation that fleet vehicles be replaced in the fall or spring, with the fall bearing the bulk of the volume. But because vehicle values change so rapidly in the fall, it can make an enormous difference when a given vehicle reaches the market during that season,” said Darrin Aiken, assistant vice president of remarketing for Wheels. “Telling a client to replace in the fall is helpful, but Wheels can now provide a far more precise forecast about when that turnover should occur.” The replacement tool analyzes each vehicle individually and determines whether or not it is best to replace a vehicle now or push it off to the next order cycle.
The Vehicle Replacement Optimization tool is included as a component to FleetView®, Wheels’ web-based solution that allows fleet managers to quickly accomplish a variety of tasks online, ranging from tracking expenses to reviewing maintenance records and examining driver profiles. Vehicle Replacement Optimization helps manage a client’s total lifecycle cost at the vehicle level by analyzing a variety of factors, including the expected retail market, vehicle model, odometer, monthly mileage and downtime expenses. It recommends the best four week period to replace a specific vehicle. The software also calculates the total predicted savings realized when a fleet manager follows the optimization schedule. Finally, the application produces a replacement report complete with recommended order dates to support the recommended replacement time.
When the tool opens, fleet managers have the opportunity to review their current policies and other criteria affecting the analyses. For example, a fleet may have a blanket policy of replacing a vehicle once it reaches 36 months or 60,000 miles, and its manager may know that driver downtime costs the company about $550 per occurrence. The search results display vehicles recommended for replacement and identify the month to replace each vehicle for optimum resale, as well as potential cost impact per vehicle and overall savings. The flexibility of the application allows fleet managers to make adjustments to their policies, residual rates and other factors, and recalculate the effects.
Managing depreciation, the most significant vehicle-related expense for companies with fleets, is key to controlling costs. “While managing replacement on a vehicle-by-vehicle basis is the best way to control depreciation and maximize savings, most fleet managers do not have the time or resources to do so,” said Stratford Dick, Wheels’ director of e-commerce. “The Vehicle Replacement Optimization tool, offered through our FleetView system, allows clients to easily and automatically make decisions that can result in savings of several hundred dollars per vehicle, and sometimes thousands.”