CAFM Vehicle Acquisition & Disposal 2 — Questions and Answers
Question 1: Which acquisition method allows a fleet to add vehicles without a large upfront capital expenditure?
- Outright purchase with cash
- Operating lease (Correct answer)
- Spot market purchase
- Trade-in allowance
Correct answer: Operating lease
An operating lease transfers use of the vehicle to the fleet without requiring full purchase price payment, preserving capital.
Question 2: What is the primary financial advantage of a closed-end lease for a fleet manager?
- Fleet manager bears residual value risk
- Lessor assumes residual value risk at lease end (Correct answer)
- Fleet owns the vehicle at termination
- Monthly payments are higher than open-end leases
Correct answer: Lessor assumes residual value risk at lease end
In a closed-end lease, the lessor sets and assumes the residual value risk, protecting the fleet from depreciation surprises.
Question 3: A fleet manager wants to ensure vehicle specifications meet operational needs before ordering. Which process best accomplishes this?
- Retroactive spec review after delivery
- Conducting a needs analysis prior to ordering (Correct answer)
- Matching competitor fleet specs directly
- Using the prior year's spec sheet without revision
Correct answer: Conducting a needs analysis prior to ordering
A needs analysis evaluates operational requirements, ensuring vehicle specs align with actual usage before procurement.
Question 4: Under an open-end lease, who is responsible if the vehicle's realized auction value is less than the projected residual?
- The vehicle manufacturer
- The auction house
- The lessee (fleet) (Correct answer)
- The insurance carrier
Correct answer: The lessee (fleet)
In an open-end lease, the lessee is responsible for any shortfall between the actual sale price and the projected residual value.
Question 5: Which disposal method typically yields the highest return for well-maintained, low-mileage fleet vehicles?
- Wholesale auction
- Retail sale to employees or public (Correct answer)
- Scrap/salvage yard
- Trade-in to dealer
Correct answer: Retail sale to employees or public
Retail sales to employees or the public typically achieve higher prices than wholesale because the buyer pays closer to market value.
Question 6: What document formally authorizes a vendor to supply vehicles and establishes pricing and terms for a fleet?
- Bill of lading
- Master purchase agreement (Correct answer)
- Vehicle registration
- Title certificate
Correct answer: Master purchase agreement
A master purchase agreement outlines negotiated pricing, delivery terms, and conditions governing fleet vehicle procurement.
Question 7: When disposing of fleet vehicles, which environmental regulation requires fleet managers to ensure proper handling of hazardous fluids?
- FMCSA Hours of Service
- EPA Resource Conservation and Recovery Act (RCRA) (Correct answer)
- DOT Part 382
- OSHA 1910.178
Correct answer: EPA Resource Conservation and Recovery Act (RCRA)
The EPA's RCRA governs the disposal of hazardous wastes, including used motor oil, coolant, and other vehicle fluids.
CAFM Vehicle Acquisition & Disposal 2
Which acquisition method allows a fleet to add vehicles without a large upfront capital expenditure?