Determining Vehicle Replacement Year Using Replacement Model

Abstract

The objective of this research is to help the vehicle buyers while deciding of buying a vehicle. This research is based on studying and finding out the maintenance index value of a car. Nowadays buying a new car is easier than maintaining it but what if we all had an idea of the maintenance cost and the product cost before buying a car. VMI or Vehicle Maintenance Index is the value or a score number which will indicate the Number in the aspect of Maintenance cost, Depreciation cost and Resale value, So the number will lie between 1 to 10 and on that scale. Three Car companies were considered for this research based on the sales of the companies. For calculating or justifying the VMI we used Replacement theory based on Cost of asset, Maintenance cost for 5 years with the increasing percentage value, the depreciation rates for the cars are kept same as per national insurance depreciation rate. Vehicle Maintenance Index. Considering India's car scrapping policy, the mini car has a 15-year lifespan and must be replaced within 15 years. Therefore, 15 years it translates to 10 years and gives a certain rating. This rating helps customers choose the most durable vehicle and helps them decide when to replace their vehicle. We marked the vehicle maintenance metrics for three vehicles on the developed base chart. The car's VMI rating, Make 1, got a swap rating of 5, so it got its first podium in year 13. This is acceptable, but now a scenario where both Make 2 and Make 3 got an index value of 3. If you dig deeper here, Make 3 has an update year of 10 years, so it would be placed third, but Make 2 has an update year of 11 years, so this machine would be placed second to it.