Disposal of Arriva vehicles

[iMarkeh]

Disposal of Arriva vehicles

(03/07/2020 23:23)motormayhem1 Wrote:  AWAITING SCRAP :
894 , 2712 , 4178 , 2716 , 2720 , 2730
2714 , 4169 , 4161 , 2719 , 4210 , 4100
2729

Are these heading off for scrap anytime soon or will they be like the Mylenniums and just needlessly stick around needlessly for years?

[SK15 GZG (Moderator)]

RE: Arriva St Helens Paint Shop & Repair Centre

(05/07/2020 21:11)iMarkeh Wrote:  Are these heading off for scrap anytime soon or will they be like the Mylenniums and just needlessly stick around needlessly for years?

Arriva won't scrap buses if their book value exceeds their scrap value. That's the way it's always been

[iMarkeh]

RE: Arriva St Helens Paint Shop & Repair Centre

(05/07/2020 21:49)SK15 GZG Wrote:  Arriva won't scrap buses if their book value exceeds their scrap value. That's the way it's always been

But that's stupid. A bus sat around doing nothing is making no money. Just get rid and free up the depot space. I can understand keeping some buses a few weeks or months to try and make it more level but some buses have been sat around for well over a year.

[SK15 GZG (Moderator)]

RE: Arriva St Helens Paint Shop & Repair Centre

(05/07/2020 22:52)iMarkeh Wrote:  But that's stupid. A bus sat around doing nothing is making no money. Just get rid and free up the depot space. I can understand keeping some buses a few weeks or months to try and make it more level but some buses have been sat around for well over a year.

No it isn't stupid at all. Why would any business dispose of an asset for far less than it's actually worth?

[iMarkeh]

RE: Arriva St Helens Paint Shop & Repair Centre

(06/07/2020 11:10)SK15 GZG Wrote:  No it isn't stupid at all. Why would any business dispose of an asset for far less than it's actually worth?

Well, it kind of is stupid storing unusable assets for 12+ months. If you are using the bus as a donor, that's fine, makes sense.

Arriva chose to withdraw the buses when they did and it just takes up land space which could be used for other purposes whether Arriva related or it got sold for redevelopment.

First and Stagecoach get rid of withdrawn buses as well as many other bus operators. Arriva take it to the extreme though. NW&W has over 80 buses 'withdrawn'. The highest of any Arriva groups including London which has far more buses but still a lower amount of 'withdrawn' buses. Around 25 of the buses which are being stored were built in 2001 or later. How have these not reached scrap level yet. Elsewhere companies are making it work, it's clearly an Arriva issue.

Whether you get rid now or get rid in a year, you get the same amount of money and the bus hasn't earnt you a penny extra in revenue. Get rid, get it off the books and save on land.

[SK15 GZG (Moderator)]

RE: Arriva St Helens Paint Shop & Repair Centre

(06/07/2020 19:28)iMarkeh Wrote:  Well, it kind of is stupid storing unusable assets for 12+ months. If you are using the bus as a donor, that's fine, makes sense.

Arriva chose to withdraw the buses when they did and it just takes up land space which could be used for other purposes whether Arriva related or it got sold for redevelopment.

First and Stagecoach get rid of withdrawn buses as well as many other bus operators. Arriva take it to the extreme though. NW&W has over 80 buses 'withdrawn'. The highest of any Arriva groups including London which has far more buses but still a lower amount of 'withdrawn' buses. Around 25 of the buses which are being stored were built in 2001 or later. How have these not reached scrap level yet. Elsewhere companies are making it work, it's clearly an Arriva issue.

Whether you get rid now or get rid in a year, you get the same amount of money and the bus hasn't earnt you a penny extra in revenue. Get rid, get it off the books and save on land.

Even after a bus is withdrawn from service it still has some residual book value - and depending on the vehicle's age and condition this will usually far exceed what Arriva would get from selling it to a scrap dealer immediately after the vehicle has been withdrawn. It makes far more sense to let the asset depreciate to a value where the company won't make an unnecessary loss - and anyway - what exactly would their disposal make space for?

Another example: I'm not sure on the exact value of my car but let's say for example it's £10k - if I were to sell it for £5k just so I could get rid of it quickly and buy a different car instead would lose me a lot of money

What's stupid is selling an asset - whatever condition it's in - for far less than it's actually worth

[iMarkeh]

RE: Arriva St Helens Paint Shop & Repair Centre

(06/07/2020 20:22)SK15 GZG Wrote:  Even after a bus is withdrawn from service it still has some residual book value - and depending on the vehicle's age and condition this will usually far exceed what Arriva would get from selling it to a scrap dealer immediately after the vehicle has been withdrawn. It makes far more sense to let the asset depreciate to a value where the company won't make an unnecessary loss - and anyway - what exactly would their disposal make space for?

Another example: I'm not sure on the exact value of my car but let's say for example it's £10k - if I were to sell it for £5k just so I could get rid of it quickly and buy a different car instead would lose me a lot of money

What's stupid is selling an asset - whatever condition it's in - for far less than it's actually worth

How much value exactly do some of these very old vehicles have? Everyone else seems to get rid of them quite quickly (other Arriva areas and other companies). Arriva NW&W only keep these because they have the space. If the space was more limited, they would get rid of them quicker. The disposal would allow for the land to either be used for other operational purposes or would allow the land to be sold for other purposes. I know it's only a small bit of land per depot but the overall land space works out to be around the size of a mid sized garage.
Would you have land with space for 80 buses and just dump all 'end of life' vehicles there? Bearing in mind land costs money and reducing the amount you are paying out for land means increased profits.

As for your example, I argue that is very different since if you have a vehicle which is in usable condition and you can start it up one day and just go, then the vehicle has some use and you have a reason to keep it. If however you have a vehicle on your driveway which is broken, will never move and you will never get it fixed, what is the point in keeping it. Regardless of it's value, you will get the same money now or in 3 years time. Book value is just virtual figure and as you will never, ever get the book value on some of these vehicles, just give up.

I'm sure there are some bus demolishers who would rather a bus which has some usable parts than a bus which is basically rotting away with nothing they can use.


As I have kept saying, 99% of other companies get rid of the buses because the book value is generally lower or they just get rid to free up space, I don't see why Arriva NW&W are such a special case and can't manage to do things in the same way as the rest of the industry.

[SK15 GZG (Moderator)]

RE: Arriva St Helens Paint Shop & Repair Centre

(06/07/2020 21:40)iMarkeh Wrote:  How much value exactly do some of these very old vehicles have? Everyone else seems to get rid of them quite quickly (other Arriva areas and other companies). Arriva NW&W only keep these because they have the space. If the space was more limited, they would get rid of them quicker. The disposal would allow for the land to either be used for other operational purposes or would allow the land to be sold for other purposes. I know it's only a small bit of land per depot but the overall land space works out to be around the size of a mid sized garage.
Would you have land with space for 80 buses and just dump all 'end of life' vehicles there? Bearing in mind land costs money and reducing the amount you are paying out for land means increased profits.

I don't know but it's probably in the region of a few to several thousand pounds. Bus bodies these days are mostly made from aluminium and that's worth virtually nothing in scrap value - the actual scrap value in a bus nowadays is in the weight of the chassis, engine and other running gear. They're the only things on a scrap bus that'll get a worthwhile amount of money from a scrap dealer - and even then I'd say the engine (which won't fetch a huge amount of money) is the most valuable out of all of those

Yes I would if it meant selling them later meant I got a fair price for what they'd be worth - and land doesn't cost money if you already own it. As for other operational uses - what are these exactly? Arriva aren't exactly expanding services at a rapid rate and struggling to find depot space are they?

(06/07/2020 21:40)iMarkeh Wrote:  As for your example, I argue that is very different since if you have a vehicle which is in usable condition and you can start it up one day and just go, then the vehicle has some use and you have a reason to keep it. If however you have a vehicle on your driveway which is broken, will never move and you will never get it fixed, what is the point in keeping it. Regardless of it's value, you will get the same money now or in 3 years time. Book value is just virtual figure and as you will never, ever get the book value on some of these vehicles, just give up.

Hardly. Barring the odd exception the vast majority of buses withdrawn by Arriva are still usable - but as they're at least fifteen years old upon withdrawal - other than a scrap dealer (for less than they're worth) which operators are going to buy them? Nobody. These days there's usually a large supply of much newer stock available on the second hand market which is going to last much longer

As for getting the same amount of money if you sold a bus when it was withdrawn three years ago or today - I have no idea where you've heard that but that is completely wrong. If a bus operator bought a bus (either a brand new one or one that was mid-life) tomorrow and then sold it on in three years' time they won't get anywhere near as much money as they paid for it in the first place. A bus which was withdrawn three years ago is now going to be worth less than it was back then. It's called depreciation and is a fact of life

(06/07/2020 21:40)iMarkeh Wrote:  I'm sure there are some bus demolishers who would rather a bus which has some usable parts than a bus which is basically rotting away with nothing they can use.

You'd be surprised how easy it is to get an engine going after it's been sat around for a while. Prior to me buying it my Leyland Atlantean (which I've since sold on) was sat around for years without moving - after fifteen minutes or so of looking around to check everything over it started first time. It wouldn't exactly take long for a scrap dealer - or whoever's buying it - to get an engine from a scrapped bus running again

(06/07/2020 21:40)iMarkeh Wrote:  As I have kept saying, 99% of other companies get rid of the buses because the book value is generally lower or they just get rid to free up space, I don't see why Arriva NW&W are such a special case and can't manage to do things in the same way as the rest of the industry.

I think I'll trust Arriva's judgement on vehicle disposal rather than yours

[iMarkeh]

RE: Arriva St Helens Paint Shop & Repair Centre

(06/07/2020 22:33)SK15 GZG Wrote:  Yes I would if it meant selling them later meant I got a fair price for what they'd be worth - and land doesn't cost money if you already own it. As for other operational uses - what are these exactly? Arriva aren't exactly expanding services at a rapid rate and struggling to find depot space are they?

If there are no other operational uses, they could simply reduce their depot size and sell/lease the land (if they own the land) or if they don't own the land, by reducing the amount of land they have, they will pay less rent. It all depends on the ownership of the land and how much space could be freed up. Depots with 1 or 2 withdrawn buses it will make no difference. Chester however could be halved. AS you say as well 'Arriva aren't exactly expanding at a rapid rate' and with Arriva not really showing any signs of wanting to expand (the past few have just happened as a result of another company ceasing to trade and not Arriva expanding due to demand), I think the likelihood is that in time as PVRs keep slowly dropping, smaller sites may become favourable over large disused sites.
If you have the space, you don't think about it's use, if you took away the withdrawn buses though and saw how much space they take up across all garages, you then realise exactly how much excess space you have.

(06/07/2020 22:33)SK15 GZG Wrote:  Hardly. Barring the odd exception the vast majority of buses withdrawn by Arriva are still usable - but as they're at least fifteen years old upon withdrawal - other than a scrap dealer (for less than they're worth) which operators are going to buy them? Nobody. These days there's usually a large supply of much newer stock available on the second hand market which is going to last much longer

Given Arriva rarely sell to operators (directly or indirectly), withdrawn buses tend to go for scrap. If Arriva sold to other operators regularly, it would be a very different story.

(06/07/2020 22:33)SK15 GZG Wrote:  As for getting the same amount of money if you sold a bus when it was withdrawn three years ago or today - I have no idea where you've heard that but that is completely wrong. If a bus operator bought a bus (either a brand new one or one that was mid-life) tomorrow and then sold it on in three years' time they won't get anywhere near as much money as they paid for it in the first place. A bus which was withdrawn three years ago is now going to be worth less than it was back then. It's called depreciation and is a fact of life

I probably should have been specific here. I meant same scrap value. Sorry for the confusion. Of course I agree you would get more money selling to operators if the bus is newer.

(06/07/2020 22:33)SK15 GZG Wrote:  You'd be surprised how easy it is to get an engine going after it's been sat around for a while. Prior to me buying it my Leyland Atlantean (which I've since sold on) was sat around for years without moving - after fifteen minutes or so of looking around to check everything over it started first time. It wouldn't exactly take long for a scrap dealer - or whoever's buying it - to get an engine from a scrapped bus running again

Some buses could be brought back they won't be when they are withdrawn. If Arriva wanted to use the buses again, they would have done that instead of loaning the buses to cover the Halton routes.

(06/07/2020 22:33)SK15 GZG Wrote:  I think I'll trust Arriva's judgement on vehicle disposal rather than yours

Arriva can do what they want, as they always do. Doesn't mean we can't have an opinion on it and question why they do things so differently to the rest of the industry (and to an extent, do things differently to other Arriva groups). Stagecoach dump buses in Wigan for a few months and then then get sold on or scrapped. Not many buses stay around for long after they have been withdrawn (unless the withdrawn period is temporary and there are plans to bring the buses back into service)

[Rick Hunter]

RE: Disposal of Arriva vehicles
The price of scrap goes up and down so the price paid for scrap vehicles varies from time to time. Scrap price for a decker is around £1000 to £1200 and slightly less for a single decker. As has been mentioned from the time a bus enters the fleet it's value depreciates over time to a residual value on the books, nominally around the scrap value. However if a vehicle has a major unit change, repaint or retrim then the value will be increased to reflect the cost. If you were to check the maintenance records for many of the long term withdrawn vehicles you are likely to find they had major expenditure on them in their final year or years of service. To outsiders they are looked on as scrap due to their age, but in the eyes of the company accountants they have a larger value. As the value goes down over time, some companies per month, some per quarter, then eventually the time will come when the value will be such that the scrap price will be accepted.