Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Jeff Kessler – Imperial Capital.
Jeff Kessler – Imperial Capital
First question is about fleet, the needs for your fleet management and your holding periods, are we going to be seeing an era of 30,000 mile cars out there for the industry as a whole? And, do you think that the customer is going to be able to handle the increased mileage that is probably going to be needed to increase not just for you but for everybody?
F. Robert Salerno
I think this industry will see higher mileage units out there. I think as the manufacturer and the manufacturer programs become more rational if you will than perhaps they have been through the 90s, even the late 90s and early 2000s, I think the need to increase the mileage on the cars will go up as we hold cars a little bit longer. As you well know, for someone who has been covering this industry for a long time, we use to hold cars a whole lot longer. The cars today are really much more able to withstand the mileage than they maybe were 15 to 20 years ago.
Our belief is that if the car looks presentable, smells presentable and runs in a good fashion that the mileage actually up to a certain point is acceptable. So, a lot of our operational objectives right now revolve around the three things I said and so far we haven’t had much of a problem on this at all and prior to us reducing the fleet the way we have we were edging up there. As you will recall we had longer holds on the cars and I think that’s what we’re going to return to and I think it’s something that across the industry we’re going to necessarily have to do that to obtain the profits we need.
Jeff Kessler – Imperial Capital
This is my fourth go around with this industry and back in the late 80s, 20,000 miles and above was not unheard of at all in fact, it was fairly common. Normally you guys have a very aggressive program to changing your mix of cars back and forth between program and at risk in the third and fourth quarters to basically hone out your fleet the way you want it to at the end of the year. What are you going through right now to change your fleet and get it ready for the leader part of the year.
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