While, as someone at the helm of a small or medium-sized business, you’ll want to keep your continued investment in fleet at a minimum, there comes a time when not making new purchases could actually be costlier down the line.

Optimum replacement time is a measure of when is the best time for particular parts of your fleet to be replaced. Key considerations here include: the inflationary impact on replacement price; what price you will get selling on existing vehicles; how new technology could improve fuel efficiency; the current and projected levels of maintenance costs and what significant repairs might have to be done in the near future.

You’ll also want to take into consideration how the age of your fleet reflects the company’s image. An ageing fleet can paint a business in a bad light when lined up against competitors.

Optimum replacement time is a core component of a company’s fleet strategy, ensuring the whole process is future-proofed and not going to be unnecessarily costly in years to come.

Another important term to be aware of in this space is “whole-life cost”, which includes the cost of running a servicing a vehicle over its replacement cycle.

To put this into context, despite two vehicles having the same up-front cost, a £50 per month saving on whole-life costs based on fuel efficiency, vehicle taxes, maintenance costs and varying depreciation trajectories.

If you’ve found this article useful then make sure you visit our complete A-Z of business fleet terms, which provides a complete glossary so you can make an informed purchasing decision.