Cost-Saving Ideas: Establishing an Effective Fleet Management System

Determining the Better Deal: A Case Study

You may need to make a determination on what type of vehicle is needed. A general rule of thumb is that used vehicles may require more frequent and costly maintenance than new vehicles. A real life example follows:

A county was faced with the choice of either purchasing used mid-sized vehicles or new compact models for use by departmental staff. The used vehicles were approximately one-year old and each had been driven between 15,000 and 30,000 miles. Costing about the same or slightly less than new compact models, they had more options (such as power windows and locks) and a smoother ride than their newer counterparts; therefore, they appeared more desirable.

To determine if buying used mid-sized cars was cost effective, county staff analyzed a sample of compact and mid-sized cars and calculated the total cost of operating the vehicles by reviewing bills of sale, maintenance records and fuel records. Based on this analysis, the average cost of operating a new compact-sized vehicle was approximately $525 less than operating a used mid-size vehicle, as follows:

Vehicles Average Miles per Gallon Average Fuel Cost Maintenance Cost Total Costs
Used 27 $1,642 $1,103 $2,745
New 30 $1,355 $865 $2,220
Variance 3 $287 $238 $525

The point here isn’t that a new vehicle is better than a used one, or that a compact is preferred over a mid-sized, but that you need a cost analysis based on total costs to determine the best option based on the local government's needs.

Updated 2016