Ed Bobit's Publisher's Page

Light comes to us unexpectedly and obliquely. Perhaps it amuses the gods to try us. They want to see whether we are asleep.-H.M. Tomlinson

It is difficult to get a man to understand something when his salary depends upon his not understanding it.-Upton Sinclair

I have suffered from being misunderstood, but I would have suffered a hell of a lot more if I had been understood.-Clarence Darrow

Determining Factors in Vehicle Selection

1.                  Initial Cost

2.                  Serviceability/Maintenance

3.                  Economy of Operation

4.                  Depreciation/Resale Value

5.                  Fringe Benefit/Driver Satisfaction

6.                  Administrative Ease

7.                  Company Prestige

There must be something that prevents me from understanding the yearly results of the National Association of Fleet Administrators' Vehicle Selection and Acquisition Study. Each year. NAFA's large fleet respondents assign a value (one through seven) to the key elements that go into making a purchasing decision and, each year, it is amusing to me to learn the results because of the changes.

It seems to me that about five years ago my faith had been restored when the "Depreciation/Resale" factor was voted most important, and it has been running second since then, until this year. If one can believe what is good research, and I do, it's startling to find that depreciation has slipped into an almost ignominious fourth place among fleet buyers.

Most people would admit that "Initial Cost" is surely of concern to any buyer, but for each identically-equipped model from an individual manufacturer the invoice is the same; and similar models by other makers are usually within a few dollars of each other. And anyone worth his (or her) salt is going to conclude the purchase within $25 comparatively from dealer to dealer. So, what's the large mystery or challenge to "Initial Cost" when indexed against the other factors? One can hasten to point out that "Serviceability" and "Economy of Operation" are both vital, but with the majority of fleets still buying domestic models with electronic ignition, proven engines, good EPA mileage stats, and the longest warranties in history, it is hard to subscribe to the implication that "domestic quality-has finally caught up with imports" and still rank these two factors above resale value.

Residual is the true name of the game. Just talk to an experienced wholesaler, preferably privately, and find out the hundreds of dollars difference being obtained by one fleet over another for similar vehicles. Since there is no direct accounting in resale (except, perhaps, for referencing the guide books) as there is in the new purchase invoice in the buying process, no one can actually be audited in this area of enigma called used-car merchandising. But, believe me, the professionals will tell you, repeatedly, that's the real key to saving the company the big dollars. I still cannot understand how this paramount factor tumbled to fourth.

Can you?