When is the right time to replace your light trucks and vans? That's a question we posed recently during a roundtable discussion with four of the most knowledgeable fleet managers in the business.
They are: George Weimer, director of transportation services for Continental Telecom in Atlanta (his 8,000-vehicle fleet includes 5,100 light trucks); Robert Whitfield, corporate fleet administrator for Brown & Williamson Tobacco Corp of Louisville, KY (1,750 vehicles including 900 vans); George Denick, automotive fleet manger in the corporate services department of Texaco, Inc. in New York (8,400 vehicles including 3,200 light trucks); and E. Pierce Walsh, director of fleet management for IC Industries, Inc. of Chicago (4,500 vehicles including 1,500 light trucks and vans).
Weimer: My replacement policy for light trucks and vans is four years or 70,000 miles. I'm trying to get that used trucks out on the market with something left on it to sell. And in my experience the truck will take more miles than a car will take when you go to sell it.
Walsh: For our vans, the replacement policy is 60,000 miles or three years. For the light trucks, it's four to five years and 70,000 to 100,000 miles.
Denick: Our trade-cycle policy for light trucks is currently three years and 65,000 miles. Or, if you run 100,000 miles before three years, we'll replace it. We've had some of those.
Whitfield: For our plant vehicles, for the trucks that haul the forklifts and so forth, the replacement policy is unlimited, really. Some of them are as much as 10 years old. But the majority of my vans are with the sales force, and those are on a three year/600,000-mile cycle. That's because I have a demand for my used vehicles.
The purchased can cut a window in, put a seat in, and they have created a recreational vehicles. Therefore, I am maximizing my retained value. Going out there with 60,000-70,000 miles on them is not a problem, because with some modification these vans become an inexpensive R.V. But for the plant vehicles, again, it's whenever I remind the braches to review their vehicles and to figure replacement expenses in their yearly budget.
Weimer: Do you tell them which vehicles they ought to be considering? Do you say, 'Here is the fleet; based on the mileage and the age, you should consider replacing this vehicle this year?
Whitfield: Yes, our computer puts that together on the basis of age and mileage. Then we tell them which vehicles are going to be replaced.
Denick: I'm within six months of implementing a system like that; that's the direction I want to go.
Whitfield: It's a work tool. And it helps us to maximize that retained value.
Denick: The biggest part of our job when you get right down to it is the used market. We're just starting to recognize that! I tell my management: 'I'm acquiring $20 million worth of vehicles, but I'm going to sell $7 million worth of used equipment for you.'
This is an area of opportunity that we have just begun to explore. This exploration goes beyond the traditional disposal methods of employee-sale, wholesalers, and auctions. We have had great success with employee-auctions held at lunchtime in one of our office buildings.