Back about 10 years ago, a major truck OEM decided to make electronic stability control (ESC) standard on their highway vehicles. From their perspective, the idea made sense – it was cost-effective to install and could help drivers prevent one of the most deadly crashes of all … the rollover.
But when they made the technology standard, they gave fleets a choice on whether or not to take the “standard” safety technology by offering a delete credit of about $800. This meant the fleet purchasing the OEM’s truck had to make a decision … keep the standard technology or save a few bucks by opting out.
All right, it’s more than a few bucks! If a fleet bought 1,000 trucks, it could be a fairly significant savings – say around $800,000 on their buy. For context, the fleet may spend about $125 million on the tractors themselves, so while every little bit helps, the “savings” is actually a relatively minor contribution against the total price tag. By deleting the stability option, the savings registered at about 0.64% – less than 1% of the total purchase.
Dollars aside, taking the delete option can be a fairly major gamble: If a fatality crash can cost a fleet a few to tens of millions of dollars, is the savings from exercising a delete option for a technology that may have helped to prevent the crash really worth it?
Nearly every day, this very decision – saving real money today vs. potentially saving lives tomorrow – creates a conundrum that many fleets continue to face, as advanced technologies, such as stability, collision mitigation, and others, become standard on the trucks, tractors, and trailers they are buying.
Standard for a Reason
More and more, we’re seeing safety technologies becoming standard on commercial vehicles. For example, stability control is now standard at a wide range of tractor and trailer manufacturers (also thanks, in part, to the recently enacted heavy-duty ESC regulation), and collision mitigation technologies are finding their way into standard position at an increasing number of OEMs as well. In fact, in July 2017, Volvo made the Bendix® Wingman® Fusion™ safety technology standard on their VNL and VNR models – a first for North America. In September 2017, Mack announced Fusion was standard on their new on-highway Anthem™ tractor. And Kenworth, Navistar, and Peterbilt made the Bendix® Wingman® Advanced™ collision mitigation system standard on their highway vehicles. In fact, Navistar’s action in October 2016 was also an industry first.
Standard position typically means that when you buy the truck, it comes equipped with the particular technology. Standard position, however, doesn’t mean that fleet operators necessarily opt to buy the truck or trailer with the safety system included. As noted at the beginning of this blog post, vehicle manufacturers can offer a delete credit should you, the truck buyer, elect to eliminate the technology on your vehicle. (And, as can be the case, new truck sales reps may simply match a previous spec on new orders, unintentionally forgetting to consider the safety technology addition.) So, note to self, always be sure to ask about the latest safety technologies on the vehicle model year you are evaluating.
Delete credits can range widely – from zero dollars to thousands – contingent upon the designated standard system. Yet, while electing a delete credit aids in reducing the cost of the new vehicle, it comes with a potential price nonetheless. (Visit the Bendix multimedia center at www.knowledge-dock.com to read our blog post from 11-10-16, titled “Check Your Spec.”)
Consider the Impact
Now, deleting options that don’t impact safety can be the right decision for your fleet if you feel that the offering may not be applicable to your operation. For example, should you pay extra for navigation when there are a number of off-the-shelf approaches that may be more cost-effective? However, it’s always very prudent to pause before taking the step to delete a safety system.
Why? It’s vital to thoughtfully deliberate the impact of removing a safety system merely on the premise of saving money on your initial vehicle purchase. Take into account the potential issues that may occur if you delete an option that can help to prevent a particular situation and that situation arises. For example, you elect to delete the rear-end collision mitigation technology to save, say $2,500 on the cost of your truck, and that truck rear-ends a vehicle on the highway. All other considerations aside, the cost of that single crash could be the difference between a profitable year and a loss.
When weighing the delete option, think about more than just the cost of the option. Consider the impact on your fleet’s reputation, the potential downtime from the loss of a vehicle and/or driver, the cost of cargo damaged or destroyed, increasing insurance costs, CSA scores – and the cost of possible litigation that can result from the incident. It is both prudent, and highly practical, to very carefully evaluate all the potential implications and resulting costs – not just the immediate savings – before electing to delete a standard safety technology.
Plus, the decision should probably include consideration from more than just the financial area. Consider having a conversation with your customers, as well as experts on your team – safety, maintenance, sales, your legal counsel, and even your insurance carrier – before you finalize the decision. The other perspectives may shed additional light on the implications surrounding the choice to delete. Never hurts to ask!
The same applies when purchasing used trucks. If the truck you’re buying has the technology on it, you probably want to keep it, instead of having it removed. Used trucks can have crashes too.
So as we wrap this up, let me take you back to that OEM that I discussed at the start of this piece. In relatively short order, they elected to make a policy change, retaining the delete option availability, but eliminating the credit. In doing so, there was no longer an incentive to remove the option – a prudent move, in my opinion.
What’s the lesson here? When it comes to safety, it isn’t the place to gamble. Before making the decision to save a few bucks by deleting a standard safety option, consider if it’s a savings your fleet can really afford.
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