This article was published in the March 2019 edition of NTEA News.
NTEA recently launched a new Vehicle Life Cycle Cost Tool. Designed to be flexible and user-friendly to accommodate a variety of truck life cycle analysis needs and different fleet structures, this cloud-based resource enables fleets, engineers and sales representatives to load differing depreciation methodologies (such as straight-line, accelerated and pool depreciation techniques), fuel types and regional fuel prices to fit the necessary truck or fleet analysis. Users can also incorporate the impact of income taxes into business decisions, where appropriate, and perform what-if scenarios.
Depending on needs, the template can support single-vehicle comparison decisions, vehicle class analysis and whole fleet calculations. It can also act as a forecast tool when paired with a price sensitivity analysis — often necessary when dealing with volatile fuel price scenarios.
“We’re pleased to share our new Vehicle Life Cycle Cost Tool with the membership,” said George Survant, NTEA senior director of fleet relations. “It is ideal for evaluating strategic decisions related to new technology and alternative fuel selections and supports our goal
of positioning industry companies for operational success.”
The Vehicle Life Cycle Cost Tool enables users to evaluate multiple strategic or operational alternatives in a quick, comprehensive approach. It’s valuable for fleet operators, financial administrators supporting fleet decision-making, and fleet sales teams working with clients to introduce new technology solutions.
When conducting whole fleet evaluations, results will be more accurate when breaking a fleet into similar cost profile blocks (e.g., pickups with two-wheel drive separated from four-wheel drive). From these blocks, a weighted average can be used to combine separate cost elements into a unified view of a particular vehicle class or the entire fleet. To make the most robust model possible, it’s important for users to get input from their corporate financial team on select variables (i.e., internal cost of capital and estimated inflation), and ensure all parties are in agreement on the decision-making methodology. NTEA recommends using forecasted fuel prices, averaging predictions from multiple credible sources.
This tool is a free NTEA member benefit (login required) — not available for public purchase. Association members are encouraged to set up login credentials (username/password) by creating an account, if they haven’t already. Once verified, NTEA will email direct confirmation of account activation. Learn more and access this resource at ntea.com/lifecycle. Contact NTEA’s team with any questions at firstname.lastname@example.org or 800-441-6832.