Your guide to costing and rates in 1981/82
Page 35
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M 1981/82 Tables of,Operating Costs cover all classes of Dods and passenger vehicles including saloons in four igine capacity categories. They show in detail the reakdown of standing charges on a weekly and hourly asis; running costs per mile and operating costs per mile ld per week.
They also show the minimum large which must be made to wer overheads and show a lodest profit. This is shown on mileage and weekly basis. The figures are supported by ase information supplied by ahicle, tyre and fuel companies. hey are also based on 'formation supplied by perators, finance houses, local ..ithorities and Government )1.; rces.
To add to their value, the ables are not finalised until the assage of the Finance Bill, 'hich follows the Budget abate, is assured.
Successful rate quoting is a ;ience developed by large ampanies with substantial 3sources. For most operators it as been less than even ducated guesswork.
We have taken the guesswork ut of this important aspect of usiness. Each table has an ccompanying rate card.
These rate cards show the perating cost and minimum harge per ton for each category f vehicle covering between 100 nd 500 miles per day and five )urneys per day. They can be sed as rate cards or a guide to 3tes.
Adjustments may be made to orrespond with an operator's nown cost for a particular item say rent and rates — but this ; a practice we do not acommend.
The Tables can be used by oth operator and customer. )perators are able to present -leir customers with an idependent rate source built -om irrefutable evidence. They will be able to show ategorically that their profit largin does not exceed 20 per ent.
Customers who feel they are leing overcharged will find the -ables useful to argue their case. Probably more important than 'ither of these aspects is the -ables' use in compiling a ontract rate since they take
account of anticipated increases between now and June 1982.
Over the years, CM'S Tables of Operating Costs have been widely used by insurance companies in pursuit of loss of use claims. More recently they have been used by 0-licence applicants to demonstrate to the Licensing Authority that they have a sound knowledge of what each item of operating costs amounts to.
Operators with car fleets will find the Tables invaluable when deciding whether to adopt new methods of car fleet acquisition.
In compiling the Tables, we have based the calculations on a 45-week year to take account of holidays and servicing schedules. The weekly hours have been calculated on a 40hour week. Standing charges fall into five categories. The excise licence is that applicable following the latest Budget. Wages take account of the most recent increases and represent the national average.
Rent and rates is the one area where there could be a significant variation between the Tables and the actual, owing to the difference in rateable values of property nationwide.
However, even a £2,000 difference in the total rates would mean less than one pence per mile in operating costs.
Insurance charges are also based on the national average, and may vary slightly by zones. The difference between zones is not significant in the mileage or hourly rate.
Interest charges on capital borrowed or employed are calculated on current bank interest charges.
All of these charges are constant and will be incurred even when the vehicle is not moving. Therefore the greater the mileage, the lower the standing charge per mile.
The second element in the total operating cost is running cost. These are charges incurred only when the engine is running and the vehicle is moving. They are lubricants, fuel, maintenance, tyres and depreciation.
The cost per mile is calculated by dividing the sum of these costs by the mileage run.
The operating cost can be calculated on time or mileag( Weekly cost is found by multiplying the running cost pi mile by the miles run and addir this to the weekly standing co To find the cost per hour ON total is divided by hours worke,
The mileage rate is arrived by dividing the standing chart by the miles run and adding th answer to the running cost p mile.
However, operators need n become involved with these detailed calculations. In association with Mercedes-Be (UK) Ltd transport consultanc department, we have produci 3,000 calculations which are published in the Tables.
In addition, we have product a fuel consumption cost calculator which covers a ran, of costs per gallon and varyii consumption figures. The Tab) also include a directory to ti many organi'sations connectE with road transport.