Lifecycle management is about accounting for a vehicle’s total operating costs. More than just the initial price of the vehicle, lifecycle management includes the costs for fuel, insurance, licensing, routine maintenance and parts replacement—not to mention any costs associated with administration and downtime (the loss of productivity) during repairs.
Why bother with the math? Because it gives you a more accurate idea of when to replace a vehicle in your fleet—saving you money in the long run.
Granted, not all fleets will have the same priorities in managing all the cost variables. For example, one company might be comfortable absorbing the cost of downtime, whereas another company will see it as a direct loss in revenue.
Lifecycle management makes room for managing cost variables differently. There are three widely accepted strategies for vehicle replacement.