Fleet management requires an expert hand in multiple buckets, and one of these is to accurately calculate costs. However, government construction fleets often manage a wide variety of Case construction machines, and not all costs can be calculated the same way. Fleets wanting to establish the lifecycle cost for construction equipment should follow these five basic steps:
- Determine the construction equipment’s net acquisition cost, while considering incentives and other variables.
- Pin-point the construction equipment’s estimated depreciation rate.
- Determine other fixed costs like interest, insurance, etc.
- Calculate the estimated lifetime operating expense.
- Add the estimated lifetime holding and operating costs to arrive at the estimated life cycle cost.
A publication called ‘Government Fleet’ interviewed a municipal construction machinery fleet to determine a mode for measuring lifecycle costs within regards to purchase, budget, and how to bill customers in a more effective manner. But in this article, we will focus on formula and depreciation considerations.
Formula Dictates Depreciation Calculation on Case Construction Machinery
The fleet manager for the City of Cedar Rapids, Iowa states that depreciation calculation and construction machinery is a task that commonly causes anxiety for fleet managers, but not for him. Fleet manager Denis Hogan goes on to explain that the difficulty in figuring the depreciation rate is determined by the formula that’s used. He says, “Obviously, off-road equipment is depreciated in a different manner than cars or pickups. Everything is different with an off-road piece because it’s not driving the city streets as much as a car”. Hogan explains that this means insurance rates will differ and that his industry needs to rely on the manufacturer to give fleet managers an anticipated maintenance cost.
Case construction equipment is known for delivering a high lifecycle because it’s Master technicians are the best in the industry, and they work on machines at the forefront of innovation and quality.
Hogan goes on to explain that his team uses a straight-line method of depreciation–something that works out perfectly due to no complicated percentages to factor in.
Case Construction Machines Stand the Test of Time Due to Expert Techs
Now that we have covered formula and depreciation, let;’s talk about one of the top selling points that fleep managers notice when looking for construction machines that will have a long lifecycle. Case construction machinery uses certified Master Technicians. These aren’t just your run of the mill mechanics. These are hand-picked experts that have been trained to only work on Case construction equipment, and nothing else. To earn their coveted title, Master Technicians must pass a demanding written and hands-on test while an evaluation team monitor their every move. These experts keep construction machines running like new, from year-to-year, and when emergency repairs are needed due to outside contributing forces like an auto crash or a sinkhole opening up, they know how to make the right flawless repairs to protect the machine’s integrity. All in all, Master Technicians play a role ito depreciation value and lifetime cycle, and this is why construction companies, cities, landscapers, farmers, utilities and more invest in Case construction machines without a second thought.
Talk to a Case construction equipment dealership near your headquarters or worksite today and get a projected lifecycle and depreciation analysis from a straightforward manufacturer that offers fleet managers with accurate data based on the intended use.