The E s. d. Value a Better Chassis
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Solving the Pr of the Carrier
In Comparing the Worth of One Vehicle to be Made: 1—Costs of Maintenance ; 3—Depreciation ; the Sum of all These
ier There Are Three Sets of Calculations Due to the Vehicle Being Off The Road; Indication of the Difference in Value
LAST week, in my contribution, I referred to two different makes of 6-ton 30 m.p.h.-type lorries. Both had double drop-sided bodies on long-wheelbase chassis; the price differs, one is £73 more than the other. Comparing the chassis and their specifications, I found 10 points of difference between the two, all in favour of the more expensive machine.
The latter showed to advantage in that : (1) Its rear-axle casing was a better job; (2) the brake gear was more substantial and likely to give much better service; (3) the shackle pins had much more bearing surface and were .larger in diameter; (4) the spring brackets were bigger; (5) the springs were wider and larger and had, more leaves;
(6) the king-pins were larger; (7) the frame was better braced; (8) the engine was better mounted; (9) the gearbox was a better job; (10) the wheel studs were larger.. MOreover, the, more expensive chassis was clearly a better all-round job—better designed and better finished—as compared with .the other.
It should be fairly easy to justify an extra £73 in return for all these advantages. 1 am not, by the 'way, going to attempt to justify that difference in selling price. I have no basis on which to compare the two priees. It might well happen, for example, that the more expensive chassis; embodying all these improvements, could be manufactured to sell at £73 less than the other chassis having none of the good points enumerated.
The price at which a chassis can be sold 'depends upon a variety of factors, particularly,
I should say, the skill of the buyer employed by the manufacturer. A Skilful man in that office might quite easily purchase the bigger back axle, the larger brake gear, the better gearbox, the longer, and wider springs and the material for the larger shackle pins, king-pins and wheel studs, for lessthan the other manufacturer is
'paying for the poorer quality components and the lower bulk of materials.
So with that and other unknown factors in mind, it is impossible either (a) to judge whether the advantages and improvements embodied in the better chassis have really involved the manufacturer in the extra expense, which has resulted in the increased selling price, or (b) to state, with any degree of certainty, that a vehicle whi.ch costs more than another is necessarily better than that other.
' It so happens that in this article I am concerned with neither Of these things. I know nothing of the first and I am not worrying about the second, because have examined the two chassis and studied their respective specifications. I am satisfied, at any rate, that the more expensive chassieis actually, in this case, the better job.
No. of Item
1 2 3 4 5 6 7 8 9 10
Earning Capacity the Paramount Factor All that matters, in considering this problem, is what is to be got out of the two chassis in the way of earnings. If one be capable' of earning more than the other, that is the one to choose. The most direct way to compare the two vehicles—to learn if the dearer one be worth the extra money—is to assess the prospective expenditure on maintenance, in so far as that is affected by the constructional differences.
In attempting to arrive at figures for comparative expenditure, I am, indeed, venturing into deep waters. I have to make assumptions all along the line: first, as to the number of times .attention 'Will be needed per agreed period, to each of the 10 items specified; secondly, I shall have to make my own estimates of the probable labour costs of these attentions, the amounts of new materials, spare parts, renewals, oil and so on, and the cost thereof.
I can make a reasonable assessment, because I have the necessary information to enable me to do so. What I do expect is that a number of readers will-disagree with me; some will opine that my estimate is on 'the high side, others that it is low. If that doeS happen I shall know I am not far from the truth, It will be useful to take 100,000 miles of running as the period during which comparisons can be _made: During that time the rear axle that is so substantial and well built should need attention not more than once. The other. the axle on the chassis that is not quite so good, may be in trouble five times. Now the cdst of taking down an axle on this type of vehicle and fitting new parts may be anything from £4 to£10. I propose to take £6 as an average figure. In assessing the average, I am keeping in mind that the probabilities are that most of the trouble will be in connection _with the axle shafts, the removal and replacement of • which do not take so long. It is when a differential goes that the costs mount so quickly.
In 100,000 miles, therefore, chassis Y—the better and slightly more expensive model—may be expected to involve an expenditure of £6 in repairs to the 'rear axle, whilst chassis Z—not quite so high in first cost—will need about £30 spent On it in this direction.
Respective Brake-maintenance Costs With regard to item 2, brakes, the need for attention to these will, naturally, depend upon the kind of country in which the vehicles are working, whether it be hilly' or flat. If, however, the better-class chassis requires its brakes attended to five times in those 100,000 miles, then it is quite certain that the other chassis, with the poorer brakes, will need such attention 15 times within that distance.
What attention to brakes may cost depends on how much has to be done to them, whether they have to be refaced and so on, but an average figure for taking off drums, checking facings, bleeding the hydraulic system, reassembling, and so on, is about 30s. to £2. If new facings be needed, then the cost will be considerably in excess of that, and may be £4 or £4 10s. For the more costly chassis, . which needs the more expensive operation, if less frequently; 1* can take an average figure of £3 10s. per operation, which is £17 10s, during the 100,000. miles. The other chassis, which has what I might call the second-class brake equipment, will call for attention not only many more times, but will need to have brakes refaced, etc., on a greater proportion of those occasions, so that £4 10s. may be taken as an average figure in the case of that vehicle. Fifteen times £4 10s, is £67 10s., which is the total cost of attention to brakes, etc., including all adjustments, in 100,000 miles.
Regarding item 3, spring shackles, concerning which it may be recalled that the wearing surfaces of those on the more expensive chassis are three times as large as those on the other model, it is Peasonable to anticipate that, in the period we have taken, the Y chassis will need its spring shackles renewed Once in that mileage, whilst the Z chassis will need to have them replaced three times. Taking an average cost of 23 10s,, it means that the expenditure will be £3 10s, for the one chassis and £10 10s. for the other.
Spring brackets, item 4, are likely only to require renewal in the case of breakage, but, as has been remarked, the brackets on the more. expenlive chassis have been made much stronger than those on the other model, which, in itself, is an indication that trouble has been experienced With 'spring brackets. I am going to assume, therefore, that there is one period during the 100,000 miles when the Z chassis needs spring-bracket renewal at a cost of £1 10s., but that the other chassis is entirely immune from such attention.
With, regard to the springs themselves,item 5, I am assuming that the one vehicle needs attention once, at a cost of £3 10s., and the other three times at the same-cost, making a total of £10 ,i0s.
The king-pins, the sixth item, will probably need renewal twice on the less-expensive chassis, on' which they are, as has heen stated, small, and I am taking a figure of £6 for the total cost of those two occasions, as against 23 for one renewal 'on the other chassis.
If a Replacemet Frame Be Needed
It will be recalled that the chassis fraine, item 7, was much better braced on the more-expensive chassis than on the othbr model. If anything be going th happen" to the chassis, therefore, it will presumably happen to• the other vehicle. • That will involve dismantlement of the whole vehicle, replacement of the chassis frame by a new one, and the total cost will he at least £50,
. Similarly, with the remaining items. I am taking it that the cost of repairs to the gearbox of the Cheaper chassis at 100,000 miles will be more than on the other model, and that the Wheel studs will cost 21 for the infrequent tightentogs necessary on the substantially built Chassis, as against 23 during the 100,000 miles on the other vehicle. These operations, and the respective costs,-as regards the
• two vehicles, are set out in Table 1, froth which it will be seen that the total cost of maintenance, for these 10 items
• only, total's 2202 in the case of the lower-priced chassis, as against 242 10s. oily for the other vehicle. This represents a difference of £159 10S. in favour of the more-expensive vehicle, which costs only £73 more in the first place. Moreover, that is not all. Every time that wa'rk has to be done on a vehicle there is, as a rule, some time during which it is off the road. This is not the case, of course, where a night staff is kept, because then a good deal of the work which I have in niind is done at night, so that the vehicle is ready for work the next morning. • Nevertheless, that cannot always be arranged. If a rear axle goes, if a spring or a spring bracket breaks, or if the chassis-frame craeks, then the vehicle is off the road at once and the time needed to repair it is probably prolonged by the fact that the vehicle has to be towed in, It will do no harm, and probably meet the circumstances of the majority of hauliers, if I draw a comparison between these two vehicles on the assumption that no night staff is kept and that the work has to be carried but during what is, normally, a period when the vehicle is earning money.
The comparison between the number of days lost with one chassis as against the other is shown in Table-II. While running 100,000 miles the mare-expensive vehicle, Y, is off the road for seven days only for. this. maintenance work, whilst the other vehicle loses 27i days. In order to assess what ihis means to the
operator, we must.go through the same kind of calculation as should be made—but so seldom is—when assessing loss of earnings for a claim after an accident. That is to say, we must take the gross earnings per day and subtract from the total the savings which accrue to the operator because his vehicle is not running.
Now, a:vehicle of this type, running, as has been suggested in the previous article, 800 miles per week, should earn not less than 26 10si per day gross. While it is off the road—in the garage for maintenance, repair, or other per
E94 1 51 poies—it is not consuming petrol or oil, it is not
wearing out tyres and, although it is depre
.ciating, it is not 'doing so at the. rate normally debited to it. As the vehicle is undergoing " maintenance (e)'" that also can be recorded as being saved. There is no saving of " maintenance (d) " because the cleaning and painting and usual weekly and monthly operations will
go on as before. '
These savings are as follow :—.1.1eI; 160 miles at 1.44d. per mile-230.4d.; oil, at 0,18d. ,per mile-28.8d.; .tyres; at 1..20d. per mile-192d; maintenance (e), at 1.30d. per mile-208d. Not all the depreciation will be saved, because obsolescence is going on all the time. It will be fair tp take id.' per mile for that, which. is 80d. for a day. The total of the foregoing is 739.2d. which is £3 is. 7d. The difference between gross earnings and what the operator saves is, thus, '23 8s._.5d.. per day. • The cost of 271 days at E3 8s. 5d. is £94 is. 5id. The cost of seven days at the same, price is £23 18s, lid., so that, in respect of this item, there is a Credit to the account of thebetter-class vehicle. of £70. 2s. 6id. making, with the 4159 10s. already credited, 2229 12s. 6id. .
Mileage Life of' the Two Types The tally is not yet 'complete. • It must, by now, have occurred to most readers that a vehicle which needs only seven days of attention in .100,000', miles, on account of these' 10 most important items,, is going to be worth it keep for much longer than one which is out of commission for nearly four times that number of days in the same period.
I am going to suggest that if the figure of 200,000 miles' life be taken to apply to the lower-priced chassis, Z, it will be quite safe to -take 240,000 miles or' more as the expectation of life of the more expensive machines, Y, which cost
£73 more 'in the first place.. . . This .difference is not easy to assess in figures. The situation arises more from a sense of realities than because of any actual calculation of savings. Most -Operators begin to think of replacing a vehicle when it has given a certain amount of trouble; the decision, does not turn on a predetermined mileage. It is likely, therefore, that by the time vehicle. Z has completed its 200,000 miles its owner will he thinking, " Well, I've nearly had enough of this: it's not done so badly up to now, hut it is much more -likely to get weirse than better.' I'd better see what I can get for it in part exchange." . •
With the other vehicle, Y, that is not the case. It has given campy. aluly little trouble, and should still he good for many thousands of miles, and it may easily pass the 300,000 miles mark before the time arrives when the question of its replacement becomes a current problem for its owner, I can, therefore, give no more than an estimated figure for the difference in depreciation, and my guess is id. per mile. That difference may not seem worth bothering about but in this distance of 100,000 miles it totals DO less than £52 is. 8d. This has to be added to the £229 12s. 6icl. mentioned above. to give the total excess value of the more
expensive chassis. On that basis, it is £281 14s. 2id. better than the other model, although it costs only £73 more. .• Thus, the extra expenditure of £73 is completely wiped out, with more than £200 in hand, by the time the vehicle has run 100,000 miles. If the same conditions occur during the second 100,000 of its life, -the total saving will exceed £475. This may be put another way, namely, that the economy of the better-class chassis is equivalent, during the first 100,000 miles, to .66d. per mile run. .
Another point I must mention in closing. There is One factor which can make a considerable difference to the whole of the above calculations. That is the efficiency of the service which the Manufacturer of .the vehicle provides. If the service and the cost of spare parts be such as materially to diminish the expenditure involved in the maintenance operations scheduled above and if the availability of sparesand the proximity of the service station be such as greatly to diminish the time needed for these operations, then the second figures may be affected.
Furthermore, high-quality service has a corresponding effect on depreciation,, for it enables an operator to keep a vehicle in use for longer than would otherwise be possible. The conclusion to which I have come in the above article-that it pays in the long run to buy a better vehicle—will not, in fact, be affected as the result of differentiation in efficiency of service, but the amount of savings possible by the use of the mole egpensive 'chassis may well be dimlnislid if, the service available in connection with it be less efficient and less readily available than in the case of the cheaper chassis. S.T.R.