Vehicle Acquisition & Disposal Flashcards

Which acquisition method allows a fleet to add vehicles without a large upfront capital expenditure?

Answer: Operating lease

An operating lease transfers use of the vehicle to the fleet without requiring full purchase price payment, preserving capital.

What is the primary financial advantage of a closed-end lease for a fleet manager?

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.

A fleet manager wants to ensure vehicle specifications meet operational needs before ordering. Which process best accomplishes this?

Answer: Conducting a needs analysis prior to ordering

A needs analysis evaluates operational requirements, ensuring vehicle specs align with actual usage before procurement.

Under an open-end lease, who is responsible if the vehicle's realized auction value is less than the projected residual?

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.

Which disposal method typically yields the highest return for well-maintained, low-mileage fleet vehicles?

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.

What document formally authorizes a vendor to supply vehicles and establishes pricing and terms for a fleet?

Answer: Master purchase agreement

A master purchase agreement outlines negotiated pricing, delivery terms, and conditions governing fleet vehicle procurement.

When disposing of fleet vehicles, which environmental regulation requires fleet managers to ensure proper handling of hazardous fluids?

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.