AT THE HEART OF THE ROAD TRANSPORT INDUSTRY.

Call our Sales Team on 0208 912 2120

TRANSPORT TIPS FOR TRADESMEN.

6th July 1920, Page 16
6th July 1920
Page 16
Page 16, 6th July 1920 — TRANSPORT TIPS FOR TRADESMEN.
Close
Noticed an error?
If you've noticed an error in this article please click here to report it so we can fix it.

Which of the following most accurately describes the problem?

Particularly Addressed to Those Who are Replacing Horsed Vehicles by Motors, or Contemplating So Doing.

p

ROB ABLY THERE are few, if any, of us who

cmain hstaokneesotfl.y.,psuaiymehathsinat Isveth:evewrnoenvger thing, h ng, the or something we really did not want, merely because it appeared to be cheap. The prospective owner of commercial niotor vehicles is just as likely as anyone else to make this fundamental error, and, at the present moment, he has plenty of opportunities, and even inducements, to do ao. Supposing, for example, that I find that the 30 cwt.. van I should like to buy is gOing.to cost me 2900, -and,at the same time, I am offered a chassis of a 3 to 4 ton vehicle in thorough good going order for half that price ; I ant naturally inclined to take what seems to me the better bargain.

Suitability of Vehicle More Important than Low First Cost.

The point is, however, that, if one's trade does not justify a 3 tonner, then the 3 tonner is a bad bargain at any price. Its use means constant unnecessarily high expenditure on operating costs. Supposing the 3 tanner (on account of its greater weight, coupled with the fact that its speed and, therefore, its daily mileage; is rather lower) costs ad. a mile more to run than the real 30 owt: van, the useful load being the same in tboth cases. Supposing that the ,anileage covered is 80 a day, the unnecessary expenditure amounts to a pound a day, so that, m something between a year and a year and a half, the unnecessary expenditure in operating costs has entirely wiped out the initial saving in first cost. From that time onwards the bigger vehicle means a positive loss for every mile run. .Assuming it has another three years of life left in it, it would, during that time involve an unnecessaryexpenditure of something like 2900, so that it would really be better to give it away and purchase a now 30 ewt. van than to keep it in service. This particular example has been chosen because, owing to the disposal of Government vehicles, there are far more 3 to 4 tonnera than anything else available at present, and people may well be tempted by a, drop in prices at auction sales to invest in machines which, later on, will become white elephants to them. Another form which the same error may take is the purchase of a more or less obsolete type of private car chassis at a low figure, with a. view to fitting a, van body.. Probably the gear ratio is wrong, and very likely the springs are not fittedto carry the load. The apparent cheapness of the original vehicle may be found quite illusory by the time the body has been fitted and the necessary structural alterations

made. a •

Allowing for Depreciation.

It used to be considered essential to depreciate motor vehicles in one's books on the basis of a five years' life, but, since the time when that basis was fixed, vehicles have been vastly improved, and a life of eight or ten years can be reasonably assumed, unless the mileage is very exceptionally high or the conditions of work exceptionally bad. Strictly speaking, it is not correct, when reckoning depreciation on a vehicle worth 21,000 on a basis of a 10 years' life, to knock off 2100 a year. It would.be more accurate to deduct each year a certain percentage of the assessed value at the beginning of the year. Thus, if we decide to take 20 per cent, as the depreciation during each year, we should reckon that a vehicle worth 21,000 -41ien new would be worth 2800 at the end of the first year. During the, second year we should deduct ole-fifth of 2800, getting down to 014 2640 ; at the end, of the third year we should be down to £512; at the end of the fourth year to £410; and so on. With this method, the value would never be completely written off, which is really correct, because a vehicla however old, has some sort of value either in the secondhand market or at least, as scrap.

Allocation of Depreciation Allowances.

Another point worth discussing in connection with the depreciation is the question of whether the allowanoe should come under the heading of standing charges or of running costs. It stands to reason that, if a substantial item of this sort is wrongly placed, any estimates weanay make as to the probable effects on operating costs by varying the mileage covered will lead to false conclusions. Depreciation is due mainly to two causes. One is actual wear and tear ; the other is that the vehicle gradually becomes obsolete, and would, therefore, lose in selling value, even. if it were kept in new condition and never Used. Time alone, irrespective of use; will also have effect upon value, particularly if the greatest possible care is not taken to keep the vehicle clean and to take the weight off its tyres if it is to stand idle for any length of time.

Under ordinary conditions,, depreciation is certainly due chiefly to wear and tear. This kind of depreciation is proportionate to the mileage covered, and should, therefore, be accounted for under running costs. The depreciation which is due to natural deterioration, irrespective of use, and to loss of value owing to newer and better vehicles being produced, perhaps at lower prices should come under the bead of standing charges. For rough and ready reckoning, we should probably be not far wrong if we put two-thirds of the depreciation allowance down as a running cost and the remaining one-third as a.standing charge.

The Incidence of the War Subsidy.

To those who may be looking forward to the War Department subsidy scheme as a source of contribution towards their expenses it may -be well to remark that some time will probably elapse before this scheme comes into force. When it arrives, it is not likely to provide for very huge payments or for the subsidizing of more than a, few hundred vehicles in the first instance. Before the war, the then scheme provided for a payment of about 2120 spread over three years. Now the total payment is likely to be at, about the same rate. On the one hand the value of money has decreased ; on the other, the War Office will now find it easier to get the sort of vehicle they require on to the list, and will, therefore, need to offer only a small inducement. The types which the scheme will cover will be mainly the 3 to 4 tanners and the light van. Probably, in the first instance, it will only be the former that will receive much attention, though later on it is likely that the War Department would be glad to get into touch with a considerable number of owners of vans caaayi.ng about 15 cart. Participation in the scheme will not involve much worry. There is' of course, a periodical inspection, but that may be as positively beneficial as checking"the efficiency of the work done by one's own men. If the Government ever has occasion to take over the vehicle at a time of national emergency, its owner is secure of the certainty of receiving a really good price for it at an agreed scale, instead of having to bargain and quarrel, as was often the case wheia vehicles were commandeered in 1914.

Tags

Organisations: War Office, War Department

comments powered by Disqus