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The Vital Question in Selecting a New Vehicle—

WHAT WILL IT COST TO RUN?

With Such a Large Variety of Models from Which to Choose, Purchasers Should Beware of Buying a Vehicle that is Not Completely Suitable for Its Job, and is Therefore an Uneconomic Investment in Operation

HEN considering the purchase of additions to his fleet, the commercial-vehicle operator has many factors to consider to ensure the selection of the right model. Precisely because the British commercial vehicle industry continues to retain its leading position, in world markets despite intensive competition, the home buyer, especially if he is a newcomer, is presented with a bewildering variety of chassis and bodies from which to make his choice.

In the buyer's guide; "British Commercial Vehicles for the World,' published by The Commercial Motor (3s. I Id., postage paid), 44 manufacturers are listed, whilst under one make .60 models are entered. Superimposed on this variety of chassis models there may be a dozen or more manufacturer-specified optional extras, ranging in price from a few shillings for a near-side mirror to close on £200 for a two-speed axle.

To these innumerable variations of chassis specification must be added the infinite diversity of bodies that may be built on the selected chassis—infinite because the purchaser may, and often does, request construction to his own peculiar requirements.

In the majority of cases, therefore, the possibility of making a wrong decision when choosing a vehicle does not lie in selecting an unreliable vehicle. That would be unlikely in the commercial field, at all events, because of the co-existence of competitive marketing conditions and shrewd buyers.

Rather does the danger lie in choosing the wrong type of vehicle for the job on hand. The purse strings may compel a departure from the purchase of the ideal vehicle resulting in some compromise in subsequent operation. Purchase of the wrong type, however, would prove far more uneconomic to the owner, and demoralizing to the staff, who would have to operate the equivalent of a square peg in a round hole. Particularly would this be so if the right type of vehicle, at a similar price; could have been chosen if a little more care had been exercised before the final decision was made The long-established feud between traffic and engineering departments as to the specification of the ideal vehicle may remain unresolved, yet the factor overriding all other considerations in the selection of a commercial vehicle must surely be its profitability—the sole reason for its purchase.

The extent of that profitability is determined by its revenueearning capacity and operating costs, and the ability to resolve a working and acceptable compromise between these conflicting

factors is the essence of good transport management. Its achievement in the day-to-day operation of a commercial fleet is difficult enough without the handicap of unsuitable vehicles.

Traffic considerations in selecting a new vehicle must obviously be peculiar not only to each operator, but often to a specific traffic, and, in consequence, do not readily permit evaluation by a common yardstick. Many established operators,

in fact, evolved the most efficient vehicle applicable to their conditions only after long experience in daily use.

Some comment may, however, be of assistance to new readers concerning revenue-earning capacity, as distinct from vehicle capacity, and its relation to special and standard vehicles.

Probably the most common goods body is the simple platform, which is cheap to buy and is light. Its low weight permits maximum payload within the limits of gross weight legally prescribed.

Profitable though it is to carry the maximum of traffic on each journey, some consideration has also to be given to turn-round times. After careful costing of alternative methods of operation, it may be found that, on balance, more traffic per day may be moved if the permitted payload is reduced by fitting tipping gear to the chassis and sides to the body.

For the same reason, the more elaborate bulk-delivery bodies or tankers (both of which are becoming increasingly popular) may effect overall operational economies despite the increase in both the outlay and the unladen weight. Alternatively, whilst operational costs may not justify their adoption, trade custom or changes in methods of distribution may necessitate their use. In that event, the haulier would have to be assured that the extra cost of running a more expensive vehicle was reflected in the rates paid by the customer.

Moreover, the more specialized the vehicle, the less adaptable will it probably prove for alternative use. Its final resale value may also be lower than for one with a standard platform body.

Loading and Unloading A further point in considering whether or not a more expensive body is justified by the subsequent reduction in turn-round time concerns the maintenance of optimum conditions at the loading or unloading points. Any fall below those conditions —which is not unlikely in these days of full employment— must work in favour of the less expensive vehicle, as it is imperative that the higher-priced vehicle should work to the scheduled maximum if it is to justify its purchase.

Articulated vehicles, particularly of a heavier type than previously, continue to grow in popularity, following improvements in semi-trailer design. Wrongly used, however, they could fail to give the expected results. If the object is to provide interchangeability of semi-trailers to facilitate loading and unloading, the scheme will work satisfactorily only if adequate loading bays, gangs and, above all, control are also assured.

Unloading facilities. must be arranged to allow for the inherent lack of urgency about a detached semi-trailer, compared with its motor counterpart. Otherwise, unpopular traffics may take longer than they should before being finally

Inloaded, thereby defeating the object of obtaining a Quicker urn-round by adopting articulation.

In many instances, the articulated vehicle will give a higher iayload capacity at lower initial cost than a comparative rigid :chicle. It would be unreasonable, however, to expect, at he same time, an equal performance in hilly districts.

Whatever variations there may be in the type of body to fit he traffic, operating costs do, at least, provide a firm yardstick iy which to judge the returns to be expected from initial :xpenditure. Whilst the prospective purchaser may be tequainted with the several factors which have to be considered n commercial-vehicle selection, there still remains their ,roper evaluation. I will, therefore, calculate the total amount the purchaser would spend in five years. The popular 7-ton oil-engined slatform lorry is used as an example, and I will assume that he average weekly mileage throughout the period is 800. kllowing for two weeks per year when the vehicle would not le on service because of holidays or overhaul, the total mileage iperated during the five years would therefore be 200,000.

Two Groups

The corresponding cost of operation should be considered in ,wo groups—standing costs and running costs, each consisting )f five items—as shown in "'The Commercial Motor' Tables Operating Costs." Grouped under standing costs are licences, wages, rent and rates, insurance and interest; fuel, lubricants, tyres, maintenance and depreciation comprise the running costs. Assuming an unladen weight in the 31-3-1-ton range, the annual tax would be £42 10s., or £212 10s. for the five years, plus £10 for the recently increased A-licence fee. Wages, together with appropriate contributions for national and amployers' liability insurance, are estimated at £8 15s. per 14-hour week, rent and rates at 10s. a week, and insurance at £100 a year, Interest; at 3 per cent. on an initial outlay of £1,800, would account for £54 a year.

The main item of running costs—fuel--is based on a consumption of 16 m.p.g., with fuel at 4s. 3d. per gallon, giving a cost per mile of 3.19d. Lubricants are estimated to cost 0.26d. per mile, tyres 1.35d. (based on a life of 40,000 miles) and maintenance, 2.07d.

In this instance, depreciation will be based on a vehicle life of 200,000 miles (the full five-year period). Deducting the cost of a set of 8.25-20-in. tyres (approximately £225) and a residual sale value of £175 leaves a balance of £1,400 to be depreciated over 200,000 miles-1.68d. per mile.

Total expenditure to the nearest pound on these 10 items over the five-year period of 200,000 miles is set out in the accompanying table in column A, and the total standing, running, and operating costs appear in column B. The relative cost of the 10 items is shown as a percentage in column C, with the three group percentages in column D.

Elaborate Body Regarding the firstitem—licences—a slight increase in unladen weight, resulting from fitting a larger or more elaborate body would increase total costs for the five-year period by almost £18 15s. and similarly for the next category-31-4 tons. Over 4 tons the increase in licence duty would be £25 per five years for each additional 5 cwt. of unladen weight—but still only 0.23 per cent. of the total operating costs. Against that the payload would be correspondingly reduced, unless the manufacturer's recommended maximum gross weight was well below the legal maximum.

In accordance with the practice adopted in compiling " ' The Commercial Motor' Tables of Operating Costs," wages have been based on a 44-hour week, irrespective of the mileage covered. Nevertheless, although an increase or decrease in total weekly drivers' hours is largely determined by traffic fluctuations, it is relevant to vehicle selection to note that equipment or design cutting terminal time by only an hour on each of two trips per day could have a substantial effect. At current Grade 1 rates of overtime at time-and-a-half, this would amount to £703 2s. 6d. for the five-year period under review, assuming overtime was already being worked.

In fact, the economies may well be greater, dependent upon individual circumstances, resulting from the extra revenue accruing from the additional trips permitted by reduced terminal time. Formerly, where overtime was not being worked, there may have been a period towards the end of each statutory daily shift which could not be productively .employed. By reducing terminal time, this period might be increased sufficiently to allow that profitable extra load.

The smallest item shown in the table. relates to rent and rates, and has been arbitrarily estimated at £130 for five years. Should a customer insist on covered overnight accommodation for his traffic, it would be pertinent, when selecting an additional vehicle, to consider the £130 in comparison with the extra cost of a van body instead of a platform.

In considering larger or more expensive types, it should be noted that annual insurance premiums for commercial vehicles operating on A licences rise by approximately £1 to £1 5s. for every £100 increase in value in excess of £1,000, and £7 10s. to £10 for every ton in excess of 10 tons gross carrying capacity.

Corresponding increases in interest charges would be less severe. Assuming a rate of 3 per cent., the figure of £270 estimated as the interest charge would be increased by £15 per five years for every additional £100 in the initial outlay.

Because fuel represents such a large proportion of the total operating costs—over 25 per cent, in this instance—even fractional improvements in consumption would yield substantial financial benefits. If, for example, the estimated consumption rate of 16 m.p.g. were improved to 17 m.p.g., the saving during the five years would amount to over £158—a point to be borne in mind when considering the extra cost of fuel-saving equipment, such as overdrives and two-speed axles.

Saving Fuel

Convincing evidence of oil-engine economy can be obtained from the figures shown in the accompanying table when compared with those for petrol-engined vehicles. Whilst claims of over 75 per cent, improvement are often made as a result of conversion to oil fuel, even if only 60 per cent. is allowed here (10 m.p.g. for the petrol-engined 7-tonner as opposed to 16 m.p.g. for the oiler), the comparative petrol and oil-fuel costs would be £4,250 and £2,658, a difference of £1,592 in favour of the oiler over the five years. Although, admittedly, there might be an additional initial outlay when purchasing the oil-engined vehicle (to quote the case of a popular make) of between £425 to £525 according to the type of engine selected, there would still remain a saving of over £1,000.

As lubricants represent only 2.16 per cent, of the total operating costs, any attempted economy would show little return for the considerable risk involved.

Tyres, in contrast, are a big item, though economies are most likely to accrue by ensuring that sufficient time and labour are allocated to their maintenance. If oversized tyres are offered on the chosen vehicle, however, they may be worthwhile, considering their operational advantages relative to the extra cost of about £20 or so per set, dependent upon the size selected.

Maintenance costs probably vary between one operator and another more than any of the other nine items in the table. There are many reasons, such as traffic peculiarities, availability of convenient and adequate repair facilities, and the standard of driving and garage staff.

Repair Facilities

When comparing the merits of respective models and makes, however, it should be noted that maintenance accounts for the largest proportion of costs after fuel and wages—£1,725 in this instance. Consideration should, therefore, be given to such factors as comparative cost and availability of spare parts and exchange units, ease of maintenance and the experience of other hauliers operating similar vehicles.

The amount of the final item—depreciation—is also large and is determined by matters both within•and outside the operator's control. The initial cost is obviously the first factor to be considered when determining depreciation. The reputation and quality of the vehicle must also have their influence on both its mileage life and on its ultimate resale value, assuming that the operator has provided adequate maintenance in the interim. A scrutiny of used-vehicle prices will assist in determining likely depreciation rates of different makes, as well as indicating other operators' evaluations in the hard world of supply and demand. --S.B.