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Re: Further Sales
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KD 191
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26/05/2011 00:22:37
To the untrained eye a bus is as old as the gloss on its paintwork makes it look , during the mid 90's I remember being told that there was a "new" bus parked on Merchants Quay, curiosity got the better of me as nothing new was expected around this time so I headed in to have a look at this "new" bus , imagine my surprise to find the "new" bus was none other than freshly restored C 236 , so if a 30 odd year old C class can pass itself off as a new bus (even if the restoration work could only be described as excellent) then any bus can be made to look new.
Stevek211 wrote;
One would assume you'd hardly be saving money. An older bus means higher running, maintenance and parts costs. There is no resale value and scrapping of the vehicle will have some sort of cost. Selling a bus in reasonable condition gives you funds. These extra funds can be used to reduce the cost of a new vehicle.
This is exactly correct and is the primary reason CIE companies first setteled on the 12 year life span , when a bus reaches 6 years old its maintainance cost begins to rise noticably , and maintainance rises sharply at 12 years old.
There are 3 schools of thought on this topic in the bus industry globally , firstly is the policy being pursued by Bus Eireann , drive the crap out of the machine , spend as little as possible on maintaining it and get rid of it before it becomes expensive to keep , secondly is the high maintainance model where you spend more on maintainance and refurbishment and go for the full manufacturing lifespan thus you spend less on fleet replacment , option 3 is to lease your fleet then upkeep and replacment is someone else's problem.
All 3 models have their pro's and cons , option 3 can be risky as you dont own the fleet and are at the mercy of the leasing company if things go wrong along with the fact that as you have low company asset value this can effect a company's ability to borrow from banks , there is however a big tax benifit to leasing.
I have never seen a cost evaluation that favored one or the other when it comes to option s 1 and 2 , both seem to work out the same over the long term with regard to costs , its more a matter of which model best fits with an individual comapnies operational practices.
Personally , If I were running Bus Eireann , I would apply a 10 year age limit on the ENTIRE service fleet due to the intensive working day of the buses and the apalling operating enviroment across the country (bad roads ect) and then dump everything onto the secondhand market at 10 years old (and I mean everything , mini , midi , single and double deck buses and coaches even the tour coaches), with the exception of schoolbuses which I would replace with a fleet of purpose built new schoolbuses and apply the full manufacturing lifespan policy to the school fleet as they only work part time anyway. But thats just me
Edited 3 times by
KD 191
26/05/2011 00:39:13.
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