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slowmover · 02-07-2012, 02:23 PM

My post was rather long so am relieved that it hits the right note (pun intended as a former cello player), as vehicle expenses -- the overall cost -- can be a killer in so many businesses.

Something I forgot to mention, and highly recommend, comes from the world of trucks: that the truck is paid separately from the owner/driver. That is, all costs (including replacement cost; that of a future vehicle) are accounted for separately and are in no way to be listed as profit. I realize that in your business that this is not quite possible, yet I recommend it as an accounting line entry nonethess (it has to do with IRS-deductible miles, essentially cancelling that out) as it informs the mind of how to think about this. Thus, again, the understanding of CPM calculations.

If my cost, adjusted or otherwise, is 40-cpm, then an 800-mile trip is genuinely $320. The fuel cost may be but 21-cpm and it is tempting to think that the opertional cost is but $168. The $152 difference belongs to the truck. This is why total time/miles must be considered: what tires will take me the length to the expected calendar year vehicle sale date? In example my truck could well go 250k on but two sets of tires . . with the caveat that I have to run the miles in a certain time frame. This sort of thing -- a detail -- is worth your while. Same for all the other cpm entries.

For the short run I would "pay" the truck by always filling the fuel tank at jobs end and setting aside money for book maintenance (and a small amount for needed repairs for this calendar year). It can take awhile to catch up if safety-related items are aging and their individual repair/replacement dates are within sight.

Given a good-running, freely-rolling, safe & reliable transport van, then driver experience, as above, comes into play. Records, posture, mirrors, trip-planning, in short, discipline.

With those two -- monetary allocation understood and dedication to the daily use exigencies -- then do some of the many suggestions one may encounter at this site come into play:

* Scanguage
* Block heater
* Grille block (may require coolant and trans temp gauges)
* Belly pan
* Removable boat-tail (see threads on big truck aero for ideas)
* Optimal exterior mirror sizing

Other ideas may crop up (with which I to some extent disagree, such as manual steering box replacing power steering box) and they should be weighed against problems of fatigue, alertness, etc., which I see as mitigating against such changes based on long travel times.

Let's say I improve mileage by 25% over present (rather a big jump, but done to illustrate; figures are rough); from 17-mpg average annual mpg to 21-mpg. At $3.50/gl at 20k miles annually my fuel cost drops from $4,117 to $3,300; or, a savings of $785. (More important is the reduction of actual fuel used to cover the same distance as it implies less wear & tear on the vehicle; from 1,176-gls to 952-gls, a reduction by 224-gls. The implication is that the vehicle can be kept in service longer as repair costs decline per mile).

Over 20k miles my fuel cost declines from 21-cpm to 17-cpm, only 4-cpm. That is worth nearly $4000 in but five years (100k miles). Yet the outlay on a 40-cpm vehicle has been $40,000. A pennies here, and a few pennies there . . . .

This page has a link to a download from OOIDA in re CPM costs, and lays out the arguments cogently.

Fuel cost is simply the largest driver-dependent variable. Other costs are as large or larger. While on the road it is food, meals & misc which can will up to more. This is an area ripe for a new approach by a traveling group.

It is only as a businessman that we see the value of fuel subsidization for what it is. Unlike mass transportation (trains especially) where the operating expenditures are spread society wide, the burden of personal transportation is high and is mainly unrelieved if business income is below a certain level, even with deductible miles and per diem expense deductions.

For the well-chosen business vehicle -- for the small business owner -- it is the longest life at the lowest cpm that determines success. And that the vehicle be as safe, reliable and economical when ready to retire as it was when new (not as hard as some would have us believe). Wash, wax, windshield replacement ("sandblasted" after about 150k), interior repairs/replacement of seat coverings, seatbelts, etc, are all part of this when one considers lowest possible cpm. I would assume a 250k-mile total life as a minimum given primarily highway miles and a 15 model year lifespan for a vehicle purchased at 3-5 years of age. To do it well we replace wearing items before they wear out.

I doubt that a hybrid will ever be up to this, but diesels have been doing it for years already. Fedex contractors with Sprinter vans are an example.

Okay, enough of this, thanks for your patience.

.

02-07-2012, 02:23 PM	#4 (permalink)
slowmover Banned Join Date: Oct 2009 Location: Fort Worth, Texas Posts: 2,442 2004 CTD - '04 DODGE RAM 2500 SLT Team Cummins 90 day: 19.36 mpg (US) Thanks: 1,422 Thanked 737 Times in 557 Posts	My post was rather long so am relieved that it hits the right note (pun intended as a former cello player), as vehicle expenses -- the overall cost -- can be a killer in so many businesses. Something I forgot to mention, and highly recommend, comes from the world of trucks: that the truck is paid separately from the owner/driver. That is, all costs (including replacement cost; that of a future vehicle) are accounted for separately and are in no way to be listed as profit. I realize that in your business that this is not quite possible, yet I recommend it as an accounting line entry nonethess (it has to do with IRS-deductible miles, essentially cancelling that out) as it informs the mind of how to think about this. Thus, again, the understanding of CPM calculations. If my cost, adjusted or otherwise, is 40-cpm, then an 800-mile trip is genuinely $320. The fuel cost may be but 21-cpm and it is tempting to think that the opertional cost is but $168. The $152 difference belongs to the truck. This is why total time/miles must be considered: what tires will take me the length to the expected calendar year vehicle sale date? In example my truck could well go 250k on but two sets of tires . . with the caveat that I have to run the miles in a certain time frame. This sort of thing -- a detail -- is worth your while. Same for all the other cpm entries. For the short run I would "pay" the truck by always filling the fuel tank at jobs end and setting aside money for book maintenance (and a small amount for needed repairs for this calendar year). It can take awhile to catch up if safety-related items are aging and their individual repair/replacement dates are within sight. Given a good-running, freely-rolling, safe & reliable transport van, then driver experience, as above, comes into play. Records, posture, mirrors, trip-planning, in short, discipline. With those two -- monetary allocation understood and dedication to the daily use exigencies -- then do some of the many suggestions one may encounter at this site come into play: * Scanguage * Block heater * Grille block (may require coolant and trans temp gauges) * Belly pan * Removable boat-tail (see threads on big truck aero for ideas) * Optimal exterior mirror sizing Other ideas may crop up (with which I to some extent disagree, such as manual steering box replacing power steering box) and they should be weighed against problems of fatigue, alertness, etc., which I see as mitigating against such changes based on long travel times. Let's say I improve mileage by 25% over present (rather a big jump, but done to illustrate; figures are rough); from 17-mpg average annual mpg to 21-mpg. At $3.50/gl at 20k miles annually my fuel cost drops from $4,117 to $3,300; or, a savings of $785. (More important is the reduction of actual fuel used to cover the same distance as it implies less wear & tear on the vehicle; from 1,176-gls to 952-gls, a reduction by 224-gls. The implication is that the vehicle can be kept in service longer as repair costs decline per mile). Over 20k miles my fuel cost declines from 21-cpm to 17-cpm, only 4-cpm. That is worth nearly $4000 in but five years (100k miles). Yet the outlay on a 40-cpm vehicle has been $40,000. A pennies here, and a few pennies there . . . . This page has a link to a download from OOIDA in re CPM costs, and lays out the arguments cogently. Fuel cost is simply the largest driver-dependent variable. Other costs are as large or larger. While on the road it is food, meals & misc which can will up to more. This is an area ripe for a new approach by a traveling group. It is only as a businessman that we see the value of fuel subsidization for what it is. Unlike mass transportation (trains especially) where the operating expenditures are spread society wide, the burden of personal transportation is high and is mainly unrelieved if business income is below a certain level, even with deductible miles and per diem expense deductions. For the well-chosen business vehicle -- for the small business owner -- it is the longest life at the lowest cpm that determines success. And that the vehicle be as safe, reliable and economical when ready to retire as it was when new (not as hard as some would have us believe). Wash, wax, windshield replacement ("sandblasted" after about 150k), interior repairs/replacement of seat coverings, seatbelts, etc, are all part of this when one considers lowest possible cpm. I would assume a 250k-mile total life as a minimum given primarily highway miles and a 15 model year lifespan for a vehicle purchased at 3-5 years of age. To do it well we replace wearing items before they wear out. I doubt that a hybrid will ever be up to this, but diesels have been doing it for years already. Fedex contractors with Sprinter vans are an example. Okay, enough of this, thanks for your patience. .