In less than two months since it kicked off, Caterpillar’s first fuel-consumption guarantee program, called Cat Pays You Back, now has more than 540 machines enrolled across the U.S. and Canada.
“It’s been really successful,” Jason Hurdis, senior market professional, told ENR during a June 30 phone interview from Cat’s corporate office in Peoria, Ill. “It’s really backing up what Caterpillar is about and the fuel-efficiency claims with a monetary reward.”
Fuel is a major cost for fleet owners, representing up to 35% of a machine’s total operating cost, Cat estimates. However, the latest clean-diesel engines meeting so-called Tier-4 Final emissions limits, deliver up to 20% better fuel economy than previous models. Caterpillar and Volvo are offering fuel-consumption guarantees to try to persuade customers to buy the newer, more efficient models.
“We are using it as a closure tool,” Hurdis explained.
Interest in the programs are growing fast. Starting July 1, Cat plans to add 21 machines—such as paving equipment and its 100-ton-capacity 777 off-highway truck—to a list of more than 100 machines already eligible for the program. The majority of Cat’s heavy equipment line is now covered.
“We are looking at expanding this to other non-machine platforms,” Hurdis said.
The program, which runs for purchases made between May 1 and December 31, pays fleets back $1 per gallon of extra fuel they burn over Cat’s average estimates. Users must first enroll machines online at www.cat.com/fuelguarantee within 60 days of making a purchase and activate their telematics service, which comes free with new machines for three years.
The program also includes monthly and quarterly fleet reports as well as guaranteed parts delivery in 48 hours or less, or Cat will pay freight on parts delivered late.
For example, let's take a new Cat 336F excavator, which carries a guaranteed hourly fuel-burn estimate of 7.5 gallons per hour. If client purchased a unit on July 15 and ran it for 1,000 hours through Dec. 31 at an average burn rate of 10 gallons per hour, Cat would pay back $1 for every extra gallon consumed for a total of $2,500. Users in Canada would receive one Canadian dollar per liter. Rewards are capped at 2.5x of Cat's estimated monthly average burn rate.
At the beginning of next year, Cat will issue rewards for 2015 in the form of a commercial account card that can be used to buy products, parts, rentals and other services at any Cat dealership, Hurdis noted. The program runs for three years: Buyers who enroll eligible models within the time frame this year could receive annual rewards for 2016 and 2017, as well.
“They have nothing to lose,” Hurdis said. Cat is considering expanding the program for purchases made next year, he added.