Cost-Benefit Analysis of Leasing Versus Buying Air Force General Purpose Vehicles in the Continental United States

Abstract : Given the increasingly aging vehicle fleet and declining vehicle budget, this research performed a cost-benefit analysis of leasing versus buying various Air Force general purpose vehicles for the entire continental United States (CONUS). In contrast to previous analyses, which have examined the leasing versus buying issue on a base-by-base basis, this analysis studies the issue from an Air Force-wide perspective using a cost-buying model. Costs and benefits are calculated for three purchasing options (Air Force ownership, GSA leasing, and commercial leasing) to determine and recommend the best alternative for the Air Force. Finally, a sensitivity analysis is to test the results of the cost-benefit models. The research demonstrates that the best alternative available to the Air Force is GSA leasing because of its overall lowest cost and accompanying benefits such as a newer vehicle fleet and a stable budget requirement. The current method of buying vehicles for ownership proves to be the least costly option for the Air Force when considering salvage value. Because the Air Force does not recognize salvage value, this study recommends that the Air Force convert the CONUS general purpose vehicle fleet to GSA leased vehicles.