Vehicle running costs - The AA Rates

AA Rates


 

INTRODUCTION

LeasePlan South Africa has been producing the AA rate schedules for nearly 2 years and has determined that the layout and format of the tables were becoming outdated. The schedules therefore have been updated and refined to improve their usability.  

 

In order to ensure that the AA rates tables are easy to use, the number of categories has been reduced. Analysis of earlier data revealed that the difference between the various fixed cost categories was not material and no longer warranted the high number of kilometre categories. The reduced number of kilometre categories that will be used from now on will make it easier for users to calculate the AA Rates. 

 

It should be remembered that the AA Rate tables were devised to provide users with a fair and equitable rate against which to assess vehicle performance or alternatively to enable the user to determine or exercise a fair claim for vehicle usage. The AA Rates are not intended to provide a specific or detailed rate for individual specific vehicles.

 

 AA Rates Of Vehicle Operating Costs | Passenger Cars | Light Commercial Vehicles

 


BASIS OF DETERMINATION

1.      AA RATE SCHEDULES FORMAT

The AA Rate Tables have been designed in a manner that best accommodates most permutations of user needs and all rates are expressed in cents per kilometre.

The AA Rates will be produced in a standard schedule format that comprises only two basic formats:

  • Averaged Fixed Costs                – for all Cars and LCV’s

·    Averaged Running Costs             – one table each for Petrol Cars, Petrol LCV’s,

                           Diesel Cars and Diesel LCV’s.

2.      EXPLANATION OF TABLES


2.1 AVERAGED FIXED COSTS TABLE


Averaged fixed costs include all the costs of interest, insurance, depreciation and licensing that are incurred by the vehicle owner irrespective of the number of kilometres travelled. The vehicle owner will incur these costs whether the vehicle travels 30,000 km's a year or only 500 km’s a year.

 

      2.2 AVERAGED RUNNING COSTS TABLE


Averaged running costs are those costs that vary directly with the kilometres travelled. These are fuel, service & repairs and tyre costs. The Table is split into four sections: one for petrol cars, one for petrol LCV’s, one for diesel cars and one for diesel LCV’s.

 

3.      ASSUMPTIONS


The AA Rates are calculated assuming the vehicle will be a standard vehicle used under normal operating conditions. Adjustments for "Abnormal Use and/or vehicle type” should be made by referring to Point 4 below.

 

 

3.1   FIXED COSTS

 

3.1.1 INTEREST, DEPRECIATION AND LICENSING


The 'Purchase Price' column is effectively the original price (including VAT) that was paid for the vehicle, by its current owner, whether new or used and it should not be adjusted from year to year.

 

·         The 'Purchase Price' is calculated as the price of the vehicle less the value of any built-in maintenance plan, plus the value of any standard accessories less any discounts received.

·         The interest rate used to calculate finance charges is the Prime rate prevailing at the time of calculating the tables plus two percentage points.

·         In calculating the depreciation, the average residual value percentage covering all models fitting within the specified Purchase Price ranges is applied from the standard LeasePlan tables for the stated kilometres of usage.

·         The period used for the interest and depreciation calculation is 60 months.

·         Licence fees are determined by using the average national cost of registering and licensing vehicles according to the weight and engine capacity grouping of all vehicles on the market.

 

3.1.2 INSURANCE


Insurance figures are determined according to a sliding scale based on the "Purchase Price" as defined in Point 3.1.1 above.


The scale below reflects a general average rate for the annual premium.

 

Purchase Price                     % of Purchase Price 
R 1 - R 50 000                                   8.05% 
R 50 001 - R100 000                         7.48% 
R 100 001 - R150 000                       6.33% 
R 151 001 - R200 000                       5.18% 
R 251 001 and Greater                      4.03%

 

It is assumed that:

Vehicles below R150 000 are fitted with a gear-locking device.
Vehicles above R150 000 are fitted with a vehicle-tracking device.

 

3.2 RUNNING COSTS

 

3.2.1 SERVICING & REPAIRS


These rates are based on the average real costs (including VAT) that would be incurred to maintain a vehicle with the stated engine capacity.
They are calculated using actual expense data for 150 000 km's of travel for each category size of vehicle.
The rates are applicable to all vehicles in each category whether or not the vehicle is covered by any form of maintenance plan. 

 

3.2.2 TYRES


The tyre rates reflect the average retail costs in cents per km (including VAT) for the typical standard tyres fitted to vehicles within each category based on LeasePlan’s assumed kilometre tyre life on each vehicle.

 

3.2.3 FUEL

 

Fuel Factor:

 

This is calculated by using an average of the fuel consumption figures, as published by the manufacturers, per group of vehicles within the specified engine category.

 

To calculate the fuel cents per km, you should first determine the prevailing cost of fuel in Rands and cents (e.g. R3.61 per litre) applicable to your area.

 

The fuel cost cents per km calculation is then determined by multiplying the fuel factor by the Rands and cents cost of the fuel.

 

 

For example:  8.18 x R3.61 gives a fuel rate of 29.53 cents per km

 

 

           

4.      ADJUSTMENT FOR VEHICLE TYPE & EXTRAORDINARY USE


Add the following percentages to the Running Costs only.

 

4.1 VEHICLES TYPES
Bakkie (Fully Loaded)     12%
4x4 (loaded)                  25%

 

4.2   TRAILER TOWING
Single Axle Trailer            8%
Double Axle Trailer         10%

 

 

GENERAL INFORMATION

 

1.       SAMPLE SIZE
A database of over 40 000 actual vehicle histories is used in compiling the AA Rates Schedules.

 

2.       DATA INTEGRITY AND ACCURACY
All actual maintenance costs used in the calculation of the AA Rate Schedules have been closely scrutinised for authenticity and accuracy.

      The database is updated daily with new data from LeasePlan’s managed fleet.

 

3.       REVIEW DATES

The data contained in the AA Rate Schedule will be reviewed regularly to include any changes in economic factors or price variations. The schedule remains valid until a revised schedule is released.

 

4.       QUERIES
Any queries regarding the AA Rate Schedules should be directed to the AA SA on telephone number 082 16 111.

 

 

DISCLAIMER:
While every care has been taken to ensure that the AA Rate Schedules accurately reflect the average fixed and running costs of vehicles in the relevant price and engine capacity ranges, Lease Plan Fleet Management South Africa (Pty) Ltd. and the Automobile Association of South Africa make no express or implied warranty or guarantee in respect of the assumptions, the source data or the calculations used to formulate the published AA rates, and accept no liability whatsoever for any use to which this data is put by the user.

 

 

 AA Rates Of Vehicle Operating Costs | Passenger Cars | Light Commercial Vehicles