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Cost of Ownership (CoO) – The Logical and Most Feasible Way to Make Your Fleet
Buying and Leasing Decisions
WALDEK RACZKOWSKIFORD MOTOR COMPANY
GLOBAL LIFECYCLE ANALYTICS DEPARTMENT (GLAD)
Why Fleet Cost of Ownership (CoO) Matters…
Smart Fleet customers buy vehicles based on total ownership costs – Thousands of active Fleet customers make buying decisions based on: depreciation, maintenance costs, fuel costs and operating fees
Competitive Net Operating Cost projections allow customer to compare vehicles across all OEM’s
Fleet operating costs are volume and budget driven
Over past 6 years over 2,600 GLAD CoO comparisons prepared per customer request and spec
The ultimate arbiter of the health of a brand is its residuals
The Benefits of an Improved Residual
Lower Lease Payments
Lower (Better) Cost of Ownership
Better Brand Image
Higher Customer Satisfaction
Easier Financing Support
Key Drivers of Vehicle Residuals
Long-Term Durability
J.D. Power APEAL
Initial Quality
Brand Perception
Right pricing
Retail / Fleet Mix
Incentives
Supply of 1 YIS Vehicles
Benefits of a Good Cost of Ownership (CoO) Tool
Fully updated with 3rd Party/independent Data Sources
(All variables are sourced from outside of the OEM so as to alleviate any issues of bias.)
Reflects current and forecasted market positioning
Ability to compare multiple vehicles across all segments (both domestic and import)
Consolidated and clear calculation page for end-customer
User friendly Report – Detailed yet not overwhelming
Meets Fleet CoO needs
Ability to identify all CoO gaps to take action
ALG 36-Mo. ALG 36-Mo. ALG 36-Mo.Residual % Residual % Residual %
47 47 38
GLAD Cost of Ownership (CoO) Comparison (JBS USA, LLC. Fleet Scenario) '10MY Ford Fusion SE (2.5L I-4) (FWD) vs. '10MY Chevrolet Malibu LS (2.4L I-4) (FWD) & '10MY Chrysler Sebring Touring (2.4L I-4) (FWD) 10MY Fusion SE I-4 FWD 10MY Malibu LS I-4 FWD 10MY Sebring Touring I-4 FWD
Vehicle A Vehicle B Vehicle CVehicle A Vehicle B Vehicle C
Model Year 2010 2010 2010 UsageMake Ford Chevrolet Chrysler Years in Service 3.00 3.00 3.00Vehicle Fusion (POH/200A) Malibu Sebring Miles per Year 33,333.33 33,333.33 33,333.33Trim SE 4-Dr. Sdn. FWD LS FWD Touring FWDEngine/Trans. Configuration 2.5L I-4 6-Spd. A/T 2.4L I-4 4-Spd. A/T 2.4L I-4 4-Spd. A/T Net Transaction Price $20,099 $20,454 $18,645
Financing 1,530.58$ 1,557.61$ 1,419.85$ Total Price $21,099 $21,454 $20,145 Loan Interest Rate 6.00% 6.00% 6.00% OEM National Fleet Incentive $1,000 $1,000 $1,500 % Financed 80.00% 80.00% 80.00%
Actual Down Payment 4,019.80$ 4,090.80$ 3,729.00$ Net Transaction Price $20,099 $20,454 $18,645
Depreciation 11,474.00$ 11,829.00$ 12,745.00$ Financing $1,531 $1,558 $1,420 ALG Auction Price 10,775.00$ 10,775.00$ 8,050.00$
ALG Vehicle Group Code 4 4 4Depreciation $11,474 $11,829 $12,745 ALG Vehicle Adjustment 0.12$ 0.12$ 0.12$
ALG Auction Price $10,775 $10,775 $8,050 GLAD High Mileage Adjustment ** 2,150.00$ 2,150.00$ 2,150.00$ Adjusted ALG Auction Price $8,625 $8,625 $5,900 Adjusted ALG Auction Price 8,625.00$ 8,625.00$ 5,900.00$
State Fees $1,815 $1,847 $1,684 State Fees 1,814.88$ 1,846.72$ 1,684.46$ Selected State Michigan Michigan Michigan State Sales Tax Rate 6.00% 6.00% 6.00%
Sales Tax 1,205.94$ 1,227.24$ 1,118.70$ Fuel Costs $10,683 $10,871 $11,110 Title Fees -$ -$ -$
Average Fuel Economy (MPG) 26.05 25.60 25.05 Reg/Lic Fees 12.00$ 12.00$ 12.00$
Maintenance $1,009 $994 $1,192 Fuel Costs 10,683.30$ 10,871.09$ 11,109.78$ Fuel Economy: City (mpg) 22.00 22.00 21.00
Net Operating Cost $26,512 $27,099 $28,151 Fuel Economy: Hwy (mpg) 31.00 30.00 30.00% Highway Driving 45.00% 45.00% 45.00%
Ave. Net Operating Cost per Month $736.44 $752.74 $781.98 Average Fuel Economy (mpg) 26.05 25.60 25.05
Ave. Net Operating Cost per Mile $0.2651 $0.2710 $0.2815 Maintenance 1,009.09$ 994.32$ 1,192.36$ Parts Cost 454.09$ 409.32$ 547.36$ Labor Cost/Hour 75.00$ 75.00$ 75.00$
Definitions and Assumptions for Ownership Cost Assessments
Labor Hours 7.40 7.80 8.60Total Price = Base Vehicle Invoice + Destination & Delivery + Options & Packages Net Transaction Price = Total Price - OEM National Fleet IncentiveDepreciation = Net Transaction Price - Adjusted ALG Auction Price - based on ALG forecasted auction price for '10 models @ 36-months (July-August 2010 Edition) Fuel Economy is based on actual EPA Metro-Highway Combined Data for 2010MY Fuel cost assumed to be USD $2.783/gallon. (U.S Energy Information Agency (USEIA) Weekly National Average as of: Monday, 09 August 2010)Mileage calculated at 33,333.33/year for 3.0 years in service (YIS). (JBS USA, LLC. Fleet Scenario)Maintenance calculations assume 100,000.0 total Fleet miles. (JBS USA, LLC. Fleet Scenario)Maintenance calculations were performed from '06MY cumulative parts costs and labor data User-Defined Entry Field
provided by AutoQuote and reflect manufacturers' suggested service at recommended intervals. Input from Data Source
** Mileage Adjustment ($ Charge per Mile Exceeding ALG forecast of 15K mi/year) based upon Ford GLAD Fleet High Mileage Penalty Study. Calculation
Pricing and depreciation data assumes comparably equipped Fleet vehicles always including: A/T, A/C & ABS.GLAD = Global Lifecycle Analytics Department
KEY
GLAD Cost of Ownership (CoO)