How is Loss per Car (LPC) calculated?

Loss per Car (LPC) is a key performance metric used to measure the average loss incurred for each vehicle in a fleet. The correct calculation of LPC is achieved by understanding that it quantifies the financial impact of losses relative to the size of the fleet.

To determine LPC accurately, it's essential to account for all forms of losses that may affect the fleet. The chosen answer involves adding the sub-row bad debt to other losses and dividing by the number of vehicles in the fleet. This comprehensive approach ensures that both expected and unexpected losses are included in the overall loss calculation, providing a more accurate per-car metric.

This is important for fleet managers, as it allows for better risk assessment and improved decision-making related to vehicle management, budgeting, and operational changes. By focusing on the aggregate losses related to the fleet, businesses can more effectively strategize their risk management practices.

Alternative options focus on different metrics that do not encompass the entirety of the losses attributable to each car, thus not providing a complete or accurate measure of LPC.