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Understanding Vehicle Procurement: Why Cheaper Doesn’t Equal Better

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By AssetWorks

Often, vehicle replacement and procurement processes cause a slew of headaches for fleet managers and analysts. Many fleet organisations struggle with vehicle procurement, especially when deciding whether to purchase a more expensive vehicle, or the lower cost option. 

In most cases, cheaper does not equal better. While the cheapest option maybe the best option in one given scenario, that is a dangerous principle to apply to every circumstance. Instead, your organisation should shift its focus from cost to value. Gather all of your fleet data and evaluate which is most important to help make a decision, including: historical maintenance data, needs analysis and cost comparisons. These important items will help guarantee that you make the right choice.

Take an outdoor painting project, for example. If you wanted to repaint the railing by your front door, and you chose the cheapest standard paint, it may look good for a few weeks or even months, if you’re lucky. When the weather takes a turn, the paint won’t hold up, however. It will chip, peel and leave the unprotected metal underneath exposed. On the other hand, investing in an outdoor-designed paint would have protected your railing for a significantly longer time period, despite the greater initial cost. Think about vehicle purchasing is the same way. If you go with the cheapest option and must replace it in half the time of the other option, you end up using more of your resources. 

With thorough life cycle cost analysis, fleet managers can evaluate vehicle procurement benefits and drawbacks using their existing fleet data, like maintenance data, usage data, labour rates and fuel consumption.