7 Vehicle Costing and Fuel Consumption Data

7.1 Introduction

This section focuses on whole-of-life costs and value for money factors related to vehicle fleets, drawing on information provided by FleetSmart, an independent fleet manager that looks after a number of vehicle fleets, including those of government organisations.

FleetSmart provided actual data for the following:

life-cycle costings for vehicle makes and models commonly selected as fleet vehicles
detailed information on operating costs for hybrid vehicles, as compared with a standard, non-hybrid fleet vehicle (Toyota Corolla)
comparison of actual fuel consumption data with manufacturer's information for selected vehicle makes and models
actual fuel consumption data for New Zealand based hybrid vehicles.

FleetSmart also provided case studies on procurement practice improvements introduced after a FleetCheck audit and on an analysis of lease versus purchase options for district health boards. These case studies are included in Section 8.

FleetSmart data is used with the understanding that prior approval has been obtained from FleetSmart clients to use any information linked directly to the organisation.

7.2 Vehicle full-life costing

Table 7-1 presents a sample life-cycle costing analysis (completed July 2005) 2 litre (2000 cc) and 3 litre (3000 cc) provided from FleetSmart's database. It compares whole-of-life costs for comparable fleet vehicles. In FleetSmart's experience this type of analysis is often used when an organisation wants to move staff out of larger vehicles into something smaller and cheaper.

As identified in the study survey, operating costs and whole-of-life costs are key drivers in fleet vehicle selection. This analysis illustrates the value of full cost comparisons in the selection process. While from a sustainability perspective this type of analysis illustrates the difference more fuel-efficient vehicles can make, it also highlights the impact of lease costs and funding options on the overall cost per kilometre. In their current state such analyses do not factor in other sustainability criteria such as low emissions (pollutants and carbon dioxide), safety or recyclability.

Table 7-1: Life-cycle costings for 2-3-litre common fleet vehicles

View life-cycle costings for 2-3 litre common fleet vehicles (large table)

The analysis does highlight the value of providing a feedback loop between actual fleet performance information and procurement practice - an area highlighted in the study survey as often missing. The information that should be recorded as part of the management of a vehicle fleet to determine actual vehicle performance is summarised below:

purchase price, discount levels and disposal price; or lease payments
servicing costs
tyres
Warrant of Fitness and registrations
kilometres travelled
fuel consumption data.

Notes on Table 7-1 data

These figures are provided to illustrate a process and provide an indication of differences between vehicles based on whole-of-life costing. Up-to-the-minute figures would be required to recalculate the results if this was to be used for business decision-making.
The numbers in this comparison were calculated in July 2005.
This comparison is using lease prices, not internal funding.
It is possible that prices may have moved since the analysis was completed.
Mazda has a built-in service component, therefore there are no servicing charges.

7.3 Whole-of-life costing for hybrid vehicles

FleetSmart has provided costing information to compare the purchase, lease and operating costs for hybrid vehicles with those for standard fleet vehicles. In this case the Toyota Prius and Honda Civic hybrid vehicles are compared with an automatic Toyota Corolla hatchback and Toyota Camry Sedan. This information is summarised in Table 7-2. It should be noted these figures are provided to illustrate a process and provide an indication of differences between vehicles based on whole-of-life costing. Up-to-the-minute figures would be required to recalculate the results if this was to be used for business decision-making.

FleetSmart provided the following comments to accompany the costing information for hybrid vehicles:

One area to be aware of with the cost of purchasing hybrid vehicles is that hybrids attract very little discount from the manufacturers, with government fleets only receiving a maximum discount of 5 percent (compared with discounts of around 25 percent for non-hybrid, standard fleet vehicles).

The fuel usage figures in these comparisons were based on AGO Green Vehicle Guide [www.greenvehicleguide.com.au.] values rather than on actual fuel consumption data.

The costing comparison shows that, despite a higher purchase cost than for the standard Toyota Corolla and the substantial price discounts for Corollas and other petrol-fuelled vehicles, the upfront price differential can be offset significantly by the lower fuel consumption of the hybrid vehicles. Servicing costs and residual values can also affect the cents per kilometres running cost of the vehicle. The final result in the analysis is that at a petrol price of $1.50 per litre, the hybrid vehicles cost is comparable in cents per kilometre to the Camry and between five and six cents per kilometre more expensive than the standard Toyota Corolla, depending on financing options.

The significant discounts applied to Corollas and other common fleet vehicles can make the selection of hybrid vehicles a challenging one for fleet procurement managers. However, taking into account fuel price increases and the additional environmental benefits associated with hybrid vehicles in terms of low emissions and lower use of non-renewable fuel, these start to become attractive from an overall value for money perspective.

Table 7-2: Life-cycle costings - hybrid and standard vehicles

View life-cycle costings - hybrid and standard vehicles (large table)

7.4 Fuel consumption data

7.4.1 Petrol-only vehicles

FleetSmart records actual fuel consumption data as part of its fleet management service and has provided a comparison between actual fuel consumption of vehicles included in the database and values given by theoretical vehicle fuel consumptions, as based on standard test results.

Two sources were used for theoretical fuel consumption values:

the Australian Greenhouse Office (AGO) Fuel Consumption Database, for vehicles manufactured up to and including 2003
the Australian Greenhouse Office (AGO) Green Vehicle Guide, for vehicles manufactured in 2004 and 2005.

The Fuel Consumption Database presents fuel economy ratings for both city and highway driving conditions, while the Green Vehicle Guide uses a combined fuel economy rating. The method used to determine the combined rating is defined under the Australian transport rules.

While the data has known limitations (see below) Figure 7-1 shows a close correlation between the AGO figures for city driving conditions and actual fuel consumption data recorded on the FleetSmart database. There is also a fairly good correlation between actual data and combined fuel consumption. However, actual fuel consumption is generally significantly higher than AGO values for highway fuel consumption.

This correlation between actual fuel consumption and the manufacturers’ upper range for city driving supports the findings from FleetCheck assessments carried out for local council organisations.

The implications of these findings is that, in the main, manufacturers’ information, as provided in the Australian sources used, is a reasonable guide for procurement managers and fleet managers on expected fuel consumption performance.

Limitations of Figure 7–-data

Vehicles where the FleetSmart database has fewer than 20 varieties in a group (that is, by model, year, engine and transmission) were excluded. The vehicle models shown all had between 20 and 185 vehicles within each group.
Actual fuel usage is taken from purchases on petrol cards allocated to the vehicles. So fuel bought using other payment methods is not included, nor is it known if the fuel card has been used to purchase petrol for other vehicles.
Vehicles in the FleetSmart database with low mileage (anything with less than 500 kilometres) were excluded, because of insufficient data.
Vehicles with fuel fills that were not possible (eg, records showing that a vehicle was filled with 100 litres of fuel) were excluded from the assessment.
Only vehicles less than five years old were included in the assessment.
Odometer monitoring compliance is an area FleetSmart focuses on, but any results that showed odometer readings that did not appear sensible were excluded.
The FleetSmart information does not specify the type of trips vehicles are used for; that is, whether they are used mainly for open road (highway) driving or for city driving.
The makes and models from the Australian Greenhouse office and from VCA cannot be guaranteed to be exactly the same as the New Zealand model, as specifications for vehicles may vary between countries.
The correct petrol type (ie, 91 or 96 octane) cannot be guaranteed to have been used in the analysis, as although this information can be obtained from the FleetSmart database, the complexity of verifying each transaction across the number of vehicles was considered too great.
The Australian fuels may not have the same octane levels as we have in New Zealand, which would affect fuel usage.

Figure 7-1: Comparison between actual fuel consumption and Australian Greenhouse Office values

See figure at its full size (including text description).

7.4.2 Hybrid vehicles

Table 7-3 provides actual fuel consumption information for the Toyota Prius petrol electric hybrid vehicle. The manufacturer’s fuel consumption rating for city driving is 4.4 l/100 km (AGO, 2005). The actual figures show, on average, slightly higher actual fuel consumption compared to manufacturer’s figures. However, it is still a desirable outcome in terms of fuel economy from a 1500 cc vehicle.

Table 7-3: Actual fuel consumption for Toyota Prius

View actual fuel consumption for Toyota Prius (large table)

7.5 Vehicle size and running costs

The 2003 annual Automobile Association survey of overall car running costs (for petrol-driven vehicles estimated on 14,000 kilometre per year, first five years of ownership) is summarised in Table 7-4. This highlights the variance in annual running costs per vehicle depending on engine capacity and the potential for significant savings where a fleet is comprises vehicles of smaller engine capacity. Given increased fuel costs, the argument for smaller vehicle use (where ‘fit for purpose’) becomes even more compelling.

Table 7 4: Annual vehicle running costs per vehicle

Engine capacity	Average price including registration ($)	Fixed costs ($)	Running costs ($)	Total costs ($)
Up to 1300 cc	19,662	4,105	1,991	6,096
1301–1600 cc	28,065	5,629	2,055	7,684
1601–2000 cc	36,936	7,247	2,363	9,610
>2000 cc	42,356	8,164	2,806	10,970

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