What is the economic life of your fleet?

Most road vehicles incur the bulk of their operational costs through use and not time. As vehicles age through their kilometer life they incur more and more costs per kilometer due to certain inefficiencies particularly wear and tear as a result of usage. Certain costs like vehicle maintenance escalates exponentially due to condition deterioration of vehicle parts failing which leads to the occurrence of repairs increasing as more parts need replacements as vehicles become older.

As operational costs per kilometer exponentially escalates over a vehicle’s kilometer life, the inverse is true for the cost per kilometer for vehicle depreciation which tapers off and decellerates as vehicles become older.

This phenomena produces a dynamic of a reducing cost per kilometer initially over use and time, but reaches a turning point whereafter the actual cost per kilometer starts to escalate as the vehicle ages.

The level where a vehicle reaches its lowest level of cost per kilometer is referred to as the economic life of thw vehicle.

It does not mean that the fleet vehicle necessarily needs replacement at that point, but it surely flags a significant turning point to start calculate and plan for the optimum replacement of a vehicle.

Understanding a vehicle’s ecomomic life can save companies alot of money. Getting this wrong can cost a lot of money wasted.

Autolytix understands the importance of quantifying the economic life of a vehcile to help drive efficient replacement policies resulting in worthwhile savings for customers.