The Police Patrol Car: Economic Efficiency in Acquisition, Operation, and Disposition Law Enforcement Equipment Technology U.S. DEPARTMENT OF COMMERCE National Bureau of Standards ACKNOWLEDGEMENTS This report was prepared by the Law Enforcement Standards Laboratory (LESL) of the National Bureau of Standards, under the direction of Jared J. Collard, Acting Manager, Vehicles Program, and Jacob J. Diamond, Chief of LESL. Appreciation is extended to the many police departments and commercial enterprises that cooperated in this study. KATIONAL BUREAU O*- STANDAKOS The UlOHA RY Patrol Car: TJLf . Economic ^ Efficiency in u^*? Acquisition, q^o 5 ^ Operation, and ^ Disposition by Rosalie T. Ruegg Applied Economics Program National Engineering Laboratory National Bureau of Standards Washington, D.C. 20234 prepared by Law Enforcement Standards Laboratory Center for Consumer Product Technology National Bureau of Standards Washington, D.C. 20234 prepared for National Institute of Law Enforcement and Criminal Justice Law Enforcement Assistance Administration U.S. Department of Justice Washington, D.C. 20531 Issued April 1978 U.S. DEPARTMENT OF COMMERCE, Juanita M. Kreps, Secretary Dr. Sidney Herman, Under Secretary Jordan J. Baruch, Assistant Secretary for Science and Technology NATIONAL BUREAU OF STANDARDS, Ernest Ambler, Director Library of Congress Cataloging in Publication Data Ruegg, Rosalie T. The police patrol car. (Law enforcement equipment technology )(NBS special publica- tion 480-15) ; Supt. of Docs, no.: CI 3.1 0:480-1 5. 1 . Police vehicles—Economic aspects. 2. Police vehicles—Cost effectiveness. 3. Police vehicles—Cost of operation. I. National Institute of Law Enforcement and Criminal Justice. II. Law Enforcement Standards Laboratory. III. Title. IV. Series. V. Series: United States. National Bureau of Standards. Special publica- tion; 480-15. QC100.U57 no. 480-15 [HV7936.V4] 602 .Is 77-13244 [363.2'32] National Bureau of Standards Special Publication 480-15 Nat. Bur. Stand. (U.S.), Spec. Publ. 480-15, 135 pages CODEN:XNBSAV Supersedes NBSIR 75-961 U.S. GOVERNMENT PRINTING OFFICE WASHINGTON: 1978 For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402 Stock No. 003-003-01837-6 Price $3.00 (Add 25 percent additional for other than U.S. mailing) FOREWORD The Law Enforcement Standards Laboratory (LESL) of the National Bureau of Standards (NBS) furnishes technical support to the National Institute of Law Enforcement and Criminal Justice (NILECJ) program to strengthen law enforcement and criminal justice in the United States. LESL's function is to conduct research that will assist law enforcement and criminal justice agencies in the selection and procurement of quality equipment. LESL is: (1) Subjecting existing equipment to laboratory testing and evaluation and (2) conducting research leading to the development of several series of documents, including national voluntary equipment standards, user guidelines, state-of-the-art surveys and other reports. This document is a law enforcement equipment report developed by LESL under the sponsorship of NILECJ. Additional reports as well as other documents are being issued under the LESL program in the areas of protective equipment, communications equipment, security systems, weapons, emergency equipment, investigative aids, vehicles and clothing. Technical comments and suggestions concerning the subject matter of this report are invited from all interested parties. Comments should be addressed to the Law Enforcement Standards Laboratory, National Bureau of Standards, Washington, D.C. Jacob J. Diamond, Chief Law Enforcement Standards Laboratory 111 PREFACE Expenditures for police patrol vehicles exceed those for any other item of equipment purchased by law enforcement agencies. With growing sizes of fleets, increasing diversity of vehicles for specialist jobs, and an increasing number of options available for acquiring, maintaining, and disposing of vehicles, the management of police fleets is becoming increasingly complex. The pohce fleet manager, in his efforts to provide suitable transportation to meet department requirements, has a multiplicity of objectives: to provide a fleet of the composition and size necessary to perform department duties; to provide vehicles which have adequate performance capabilities, meet safety requirements, satisfy officer morale and comfort criteria, and contribute to the desired public image; and to provide the vehicles at lowest possible cost. In turn, the manager is confronted with a number of decisions regarding provision of the fleet. He must, for example, decide what types of vehicles and how many to buy; what optional equipment is required; what utilization practices to foUow; how to secure the vehicles; what type of maintenance and repair facilities to have; how much preventive maintenance to schedule; when to replace a vehicle; and how to dispose of used vehicles. The alternative courses of action are likely to have unequal efficiencies in terms of resulting costs, but the "best" decision is not always apparent. Information and techniques are needed which will help the police fleet manager secure an effective fleet in the most economical way. In the words of one such administrator, "the need for information in this field is great. A study of existing practices and the success of the various types of operation should be documented so that the police administrator may make intelligent decisions." Elimination of inefficiencies in police fleet management can significantly reduce the cost of police services and result in substantial savings of public funds. A brief summary of this report, entitled Life Cycle Costing of Police Patrol Cars: Summary Report, was published as National Bureau of Standards Interagency Report NBSIR 74-471, in March 1974. Jacob J. Diamond, Chief Law Enforcement Standards ' Laboratory iv CONTENTS Page Foreword iii Preface iv List of Tables vi List of Exhibits viii Executive Summary ix 1. Introduction 1 2. Methodology of Life Cycle Costing 5 2.1. Life Cycle Costing 5 2.2. Break-Even Models 12 3. Cost Analysis of Police Patrol Vehicles 12 3.1. Critical Cost Elements 12 3.2. Cost of Vehicle Acquisition 14 3.2.1. Purchase Price, Resale Value, and Depreciation Cost 14 3.2.2. Cost Saving Practices in Buying and Selling 20 3.2.3. Lease vs. Buy 34 3.3. Operating and Maintenance Costs 54 3.3.1. Operating and Maintenance Costs for Patrol Cars of Different Sizes 54 3.3.2. Operating and Maintenance Costs by Type of Expenditure, and as a Function of Driving Environment, Usage Rate, and Mileage 56 3.3.3. Selection of Maintenance Facility: Centralized or Decentralized Organization and Location—Police Shop, Municipal Garage, or Private Vendor 59 3.4. Cost Effects of Alternative Vehicle-Driver Assignment Plans: The Personal Car Program 60 3.4.1. Description of the Personal Car Program 61 3.4.2. Vehicle Costs Under the Personal Car Program: Empirical Evidence 61 3.4.3. A Cost Comparison of a Personal Car Program with a Minimum Fleet/Multishift Car Plan: A Hypothetical Example 65 3.5. Patrol Car Replacement Decisions 70 3.5.1. Replacement Methodology 71 3.5.2. Replacement of Police Cars: Illustrative Cases 77 3.6. Life Cycle Costs of a Typical Patrol Car 86 4. summary 88 Appendix A. Police Fleet Practices 90 Appendix B. Sample Leasing and Maintenance Agreements 105 Appendix C. References 112 V LIST OF TABLES Page Table 1. Discounting formulas 7 Table 2. Discount factors, 2 percent interest rate 9 Table 3. Discount factors, 10 percent interest rate 10 Table 4. Discount factors, 15 percent interest rate 11 Table 5. Typical 1972-1973 price quotation for a 4-door standard size, popular model patrol car 14 Table 6. Average 1973 base prices of Ford, Chevrolet, Plymouth, Dodge, and American Motors' cars, by model 15 Table 7. Estimated 1972-1973 prices ->f different models of police- accessorized patrol cars 16 Table 8. Estimated resale values and depreciation rates for 2-year old patrol cars recently sold by a few police departments 16 Table 9. Derivation of annual depreciation rates for patrol cars owned by different types of police departments 17 Table 10. Estimated resale values at the end of each year for patrol cars, by model and type of department, over a 4-year period 19 Table 11. Typical 1973 prices of a representative selection of add-on equip- ment for patrol cars 20 Table 12. Annual cost of patrol car equipment 20 Table 13. Comparative annual ownership costs of standard and intermediate size patrol cars, by model-line, age, and department type 22 Table 14. "Holding costs" for selected items of car accessories 25 Table 15. Comparison of annual depreciation costs associated with two approaches to ownership of a more expensive patrol car 26 Table 16. Cost comparison of visi-bar light system with bubble light 27 Table 17. Acquisition cost of purchasing a patrol car compared with leasing it 40 Table 18. Estimation of garage staff requirements and annual labor cost .... 42 Table 19. Estimation of equipment cost 44 Table 20. Estimation of the annual cost of parts 47 Table 21. Estimation of garage building cost 48 Table 22. Estimated annual cost of performing maintenance in-house 50 Table 23. Estimated annual cost of contracting maintenance work 51 Table 24. Operating and maintenance costs by size of police patrol car 54 Table 25. Operating and maintenance costs of private and fleet cars, by size of car 55 Table 26. Operating and maintenance costs by type of expenditure, over the life of a sample of State highway patrol cars 56 Table 27. Maintenance cost for a sample of city patrol cars by type of expenditure and mileage interval of occurrence 57 Table 28. The effect of different driving environments and vehicle usage rates on operating and maintenance costs of the patrol car 58 Table 29. Comparative maintenance cost per mile for vehicles maintained in a sample of police shops, municipal garages and a commercisd garage 60 Table 30. Experience of a large city police department with a personal car program 63 Table 31.