Given that our suspects are typically upfi tted with the same equipment, there is little diff erence in cost here. So we need to move forward into our matrix and start what will amount to very simple math under the guise of an intimidating title of “total cost of ownership.” We need to measure the amount of time these vehicles are going to be, or were, in service. This number is important, as it will greatly affect the direction of our investigation. Some agencies have a set period of time their vehicles are in fleet.
For the first time in our investigation, we now have to move from the definite to the potentially obscure. This is the “not so scientific” practice of determining end-oflife value. Again, unless you have had recent experience with the used police vehicle market, your investigation will rely heavily on shared information.
Unlike data-sharing of today’s crimefi ghting world where the source isn’t so important, when looking for vehicle information, it is important that those from whom you glean data have similar attributes to your agency. It would make little sense to use the end-of-life value of a four-wheel drive in Florida when you live in Michigan.
No easy answer exists. The Kelly Blue Book, oriented to retail vehicles, is not where you want to be looking. Perhaps a good source would be recent police auctions. Once you have drawn a comfortable conclusion to the end-of-life value, place the values in the fifth column of our ever-growing chart. These residual values are based on 60K miles, knowing that plenty of life is left in the truck-platform SUV (Table 4).
We now have the necessary information to determine the total cost of ownership (Table 5). There may be an underlying fact buried in the total we have gotten: years of service. This can fluctuate and is not typically a concrete number. It is important to note this figure is actually buried in the maintenance and fuel costs in that these numbers will increase the longer a vehicle is kept in service. Later, we can add a “years of service” column to determine annual total cost of ownership. For now, we’ll see where using the raw data leads.
As you can see from our chart, we are starting to see what our total cost of ownership of a vehicle is per mile of service—total cost divided by annual miles operated. Alternatively, we can easily divide the total cost by the years of service. Initial cost to purchase, cost of equipment and upfi tting, maintenance cost, and fuel cost all total to be our cost of ownership. The field can now be dissected by determining cost per year to operate, or cost per mile to operate. Either of these figures can bring “real time” numbers to the administrator’s desk.
Financially sound departments may be so lucky as to rotate their fleets every couple of years, regardless of mileage and vehicle type. Still others rotate on lifecycle analysis, where, based on math, a decision is made on the length of service of a particular vehicle. Most agencies can agree that the Tahoe typically has the ability to live out a longer service life.
However, with General Motors’ five-year, 100,000-mile drivetrain warranty, there is added comfort to some to push the service of their GM products given the most expensive pieces are now factory covered. The other suspects off er extended warranties as well, but like an involuntary confession, you shouldn’t have to pay for the truth. This number in our chart may have the greatest variance and is typically dependent on sharing information with other agencies
Presenting the Facts
We have processed the vehicle scene, interviewed key players and gathered the evidence. e report has been written and it is time to take this case to the next level, the chief’s desk. Depending on the department, the chief plays a role similar to that of a prosecutor.
It is important to remember that just as a prosecutor is so far removed from police work that his or her concept of justice is based on perfect facts laid out in briefs, so may a chief be so far removed from the road that he may not understand what is necessary for officers to get their jobs done safely and in a fi scally responsible manner.
It is your job, as the fleet manager, to paint the picture for your administrator such that their only choice is to stand behind you when this issue goes to trial. Without the backing of this key individual, your case may never see the light of day.
In this time where budgets are tight, a unique opportunity presents itself for us to be able to sell the idea of total cost of ownership to our management. One way to do this is to present your case by explaining how you derived this perceived-to-be-complicated term to your chief or sheriff in the simplest of terms.
For the purpose of showing you how to fi nd total cost of ownership, there were several charts and a lot of numbers. Along with those charts we off ered explanations as to how those numbers were calculated. Today’s law enforcement administrator does not have time to do the digging you were appointed to do, so it is important not to lose the opportunity to explain the total cost of ownership signifi cance as a concept, not as a “how to.”
As you speak with your administrator, lead with your recommendation, and support it with a quick recap of how you came to this conclusion. In some cases, your chief or sheriff may just sign off on your suggestion, and dependent on the fiscal process of your organization, this may be the last step before going to bid. Of course, you may have to dive further into the process, explaining it more in depth.
Remember, the total cost of ownership numbers you produce may potentially back your boss into a corner, and like anything which finds itself trapped, a defensive posture is struck and your battle becomes more diffi cult. For that reason, it is important to understand the total cost of ownership process and be able to explain it using the simplest, easiest to understand terms.
It is important to note that the numbers shown here are estimates for math purposes only. The numbers used in the tables are for the purpose of explaining the concept only and must not be considered actual costs or the basis for decision-making. Simply add your own validated numbers!
Scott Coy is a lieutenant with the Western Michigan University Police Department. He has been in charge of the management of his department’s fleet since 2003. Coy is also responsible for all technology deployed at the department. He may be reached at firstname.lastname@example.org.