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How to make rental cars affordable to Army

June 09, 2011 | Captain Matthew Sun

     I am currently attending the ILE satellite course at Ft. Gordon, GA. One of our graduation requirements is to blog about a subject that we feel like we can contribute to. I have been hesitant to write my blog because I didn’t want to write about “just anything” in order to get this task checked off of my list of things to do. However, once I received my first rental car bill, I was once again reminded of an area that I feel the Army wastes a significant amount of money unnecessarily; and consequently, found my blog topic...

     Coming TDY to a Post like Ft. Gordon, in my case from California, means that I will need a rental car. Ft. Gordon, as is the case with a lot of other TDY locations, is simply not set up to take advantage of Mass Transit like a place like the Pentagon is, for example. There is a very real justification/need for the use of rental cars here. But the cost of renting a car for 3.5 months is exorbitant. For instance, in my situation, I am charged (and reimbursed) $986 a month for a compact car! When you figure that in my class there are 64 students, and probably 60% of them are here using rental cars; that cost skyrockets quickly. Multiply that times 3 iterations of satellite ILE at Ft. Gordon per year alone, and you can see how quickly the costs add up.

     The standard “not really addressing the problem” answer to this would be to just tell the Majors (and a few Sr. CPTs and fewer LTCs) that it is too expensive, and since the Army needs to cut back, they now have to “heel-toe” it everywhere. But there is a legitimate need for rental cars in an instance such as the one here.

     So the solution I propose is for the Army to buy fleet cars, assign them to various schools, and issue them out on hand receipt just as our books are. I would venture to say that this could save the Army at least 2/3 of what is spending now. I am frequently told that “studies have been done,” and that “it’s actually more expensive” to do what I propose, but I just don’t get how. Here is my fuzzy-math reasoning:

     I will use a Ford Focus (Budget Rental Cars Compact Class) as an example. The MSRP according to Ford’s website is $16,500. The typical GSA price is 30% below MSRP, with a 1% GSA Surcharge added back on; in this case-- $16,500x (100%-30%+1%)= $11,715. I do not know if it is cheaper or more expensive to do a separate Fleet Sales contract with Ford, but $11,715 is a good enough price point for my example.

     Assuming that a (built in 2011) car driven moderately can last for five years before needing to be replaced you could determine that it would work out to be ($11,715/60months) $195.25 a month of operating costs.

     But what about Maintenance you ask? Ok, how much would maintenance cost on a (built in 2011) car driven moderately that comes with the standard warranties? Using Intellichoice’s “cost of ownership” chart, a 2009 Ford Focus (the most recent data available) will cost a total of $1,707 in maintenance and $855 in repairs over a 5 year period. In other words—(1707+855)/60 months= $42.70 in monthly maintenance and repairs costs. Now, add those two figures together, (195.25+42.70) and you get a total cost of $237.95. Let’s round that up to $240 to keep it simple.

     Now, I am paying (and the Gov’t is paying me back) $986 per month for a compact car. I have to pay my own fuel and insurance costs, so those don’t add to the monthly operating cost. Therefore, by my above example, Uncle Sam is wasting (986-240) $746 a month!!

     I know, I know, the next argument is that the funds come from different sources. Well, why would that have to change? Couldn’t (continuing my ILE example) the School bill my unit $240 a month for my use of their car? Don’t you think my home station Commander would be happy to see me use $746 LESS a month out of his funds?

     I admit that there might be some minor costs I may have overlooked. There might even be a rule (law?) that needs to be changed in order make this a reality. But I certainly didn’t overlook $746 a month in mistakes!

     Let’s work the final costs out using my current ILE class of 64 Officers, with roughly 60% using rental cars. That comes out to 39 Officers. Now multiply that by 3 classes per year and you get a total of 117 car rentals per school year. 117 rentals times $986 a month is $115,362. Contrast that with 117 times $240 a month (of Army owned cars), and you get $28,080. In one year, at one TDY location, the Army just saved $87,282!!  How many TDY schools where rental cars authorized (and rightly so) are there across the military? How much money could this save them overall?

     If you have any comments, feel free to post a reply below or submit them to me at:

-CPT Matthew Sun


  • CPT A.F.
    6/11/2011 5:18 PM
    CPT Sun,
    your concern is legit however the idea of having a fleet is not realistic. Most civiliarn corporations have contracts with rental car companies to get a cheaper rate. Another alternative that my civilian employer takes advantage of is more than one person per vehicle. You are very lucky as to get such a luxury, some of us don't.
    CPT A.F.
    • Matthew Sun
      6/13/2011 9:51 AM
      Whenever it is possible, we are designated to share cars. On some TDYs, up to 5 people per car. However, in this case, the class is broken down into smaller sub-groups, which are on different schedules. On top of which, people come from individual units across the Army and thier individual units are paying for their transportation, so it is unrealistic in this case to have people sharing cars. Again, when it's feasible, we share cars.

      Also, the rate I quoted above is our "corporate rate," which is the government rate. But more specifically, I want to address the "luxury" aspect of your comment.

      First, I don't believe it's a luxury to be issued the proper tool to accomplish a mission. Furthermore, I'm not complaining about getting a rental car, I'm very appreciative of it. But I am speaking specifically on how to reduce the costs of it so that we can continue to receive such a needed benefit. I also want to save the Army and the taxpayer (of which I am one too) money. Either way, thanks for your feedback.
  • donald
    6/12/2011 11:36 AM
    ho, bradah, jus' use one mo-ped!
    • Matthew Sun
      6/13/2011 11:46 AM
      If can, can. If no can, no can.

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