Fleet Maintenance Costs for Vans and SUVs Remain Flat in CY 1999

The good news is that maintenance costs for vans and sport/utility vehicles used in fleet service were flat during the 1999 calendar year. The even better news is that these maintenance costs are projected to decline in the next few years as older vans and SUVs are replaced by newer-generation models. These new models feature improved vehicle build quality and longer change intervals for oil, fluids, coolant, and spark plugs. In addition, maintenance costs are projected to decline if the current trend in purchasing extended warranty coverage continues among commercial fleets.

“Maintenance costs have been pretty consistent for vans and SUVs when comparing 1999 costs to those incurred in 1998,” said Mark Johnson, truck department team leader for PHH Vehicle Management Services, which conducted this year’s maintenance study for Automotive Fleet magazine. The survey analyzed maintenance expenses for 39,631 vans and 1,560 sport/utility vehicles over seven mileage ranges from Jan. 1 to Dec. 31, 1999.

Agreeing that van and SUV maintenance costs have remained stable in the past year is Brian Schultz, senior materials management specialist for Great Lakes Gas Transmission in Troy, MI.

“Maintenance costs have remained fairly flat. It’s the operating costs that are escalating due to higher fuel prices being passed on to us by the ‘oil thieves,’” said Schultz. One of the nation’s largest van fleets is R.J. Reynolds Tobacco in Winston-Salem, NC, which, out of its 2,266-vehicle fleet, operates 1,006 vans and 25 SUVs. According to Jan Faries, fleet operations manager, maintenance and repairs on full-size vans for a rolling 12-month average for 1999 were 4.09 cents per mile (cpm) compared to 4.74 cpm – a .65 reduction. Likewise, for minivans operated by R.J. Reynolds, maintenance and repairs on a 12-month rolling average in 1999 were 2.77 cpm versus 2.89 cpm in 1998 – a .12 reduction. “These costs include all maintenance and repair expenses except oil, tires, and accident repair,” said Faries.

Although labor costs have risen, this increase has been offset by longer maintenance intervals, which help decrease annual expenditures. “For instance, coolant now lasts between 100,000 to 150,000 miles in today’s vans and SUVs, and platinum-tipped spark plugs don’t have to changed for 60,000 to 100,000 miles,” said Johnson. He predicts that maintenance costs will decrease further in future years. “The quality of minivans and SUVs has been slowly increasing, especially powertrains, steering, and the increased use of electronics, such as electronic fuel injection systems, which experience fewer problems,” added Johnson.

David Fern, manager of financial reporting/division fleet manager for E-Z-Go Textron in Augusta, GA, says that not only have maintenance costs for SUVs, in general, stayed flat, but that major maintenance problems have also decreased. Echoing Fern’s comments is Marjorie Schraut, assistant fleet manager for Pfizer, who said, “although vans and SUVs are only a small part of our fleet, their maintenance costs have remained stable.”

However, some fleets report that four-cylinder vans have been prone to maintenance problems. “We have been running four-cylinder vans and have experienced some maintenance issues,” said Edith Hollerson, fleet administrator for Neopost, a mailing and shipping solutions company headquartered in Hayward, CA. “We are now running six-cylinder vans and anticipate our costs will go down.”

Another fleet – Pep Boys – runs a combination of vans and sport/utility vehicles. “I haven’t seen these vehicles generate repair orders that are out of line,” said Fleet Administrator Barry Liftman. “The major difference in maintenance costs is with replacement tires. These tend to cost significantly more than the basic Taurus or Ranger tires.”

A major contributing source of maintenance costs for vans is overloading. “If gross vehicle weight restrictions were rigorously observed, maintenance costs would decrease,” said Johnson. Overloading causes increased brake and tire wear. “However, if fleets spec the right van for their application, they could actually see brake and tire costs decrease,” said Johnson.

Other fleets report mechanical problems with sliding side doors. “On SUVs, we haven’t had too many problems, but we have had front axle seal problems on nearly all of our 4x4s,” said David Carr, manager, motor pool operations for University of Washington in Seattle. “The cost per mile is slightly higher for 4x4s due to the poor fuel economy, but maintenance-wise we seem to be within the normal range of our other utility vehicles.”

On the other hand, some fleets, such as Hancor, report maintenance costs being higher for SUVs than for vans. “We have experienced very little extraordinary costs on our vans,” said Sue Cutright, purchasing manager for Hancor Inc. in Findlay, OH. Another fleet, Duke Energy, reports problems with 4x4s that have shift-on-the-fly capability. “It’s expensive to repair and it is unpredictable,” said Katy McFadden, fleet manager for Duke Energy in Denver, CO. “The problems occur at any mileage. In addition, there are occasional ‘check engine’ computer problems,” she added.

Another company that operates SUVs in its fleet is The Progressive Corp., an insurance company in Highland Heights, OH. Progressive keeps its SUVS in service up to 80,000 miles in contrast to the 60,000-mile limit for sedans. According to Kathy Schulz, fleet manager for The Progressive Corp., she has not had any significant increases in repairs for SUVs in the past year. “We tend to have more transmission and engine failures, but we also run these vehicles much harder than the sedans,” adds Schulz. “Many times the vehicles are kept idling throughout the day at accident scenes. Also, our SUVs are typically office pool vehicles, which creates a situation where there is no one person responsible for maintaining the vehicle.”

Growth in Extended Warranties

One cause of increased maintenance expense is driver habit. Driver habit affects the majority of the “wear items” on vehicles, such as tires, brakes, and clutches.

One way to reduce breakdowns and major repairs would be to incorporate a preventive maintenance inspection program. By doing a routine preventive maintenance inspection every 3,000 to 5,000 miles, repair costs can be reduced and a problem corrected before a catastrophic failure.

Another way to lower maintenance expense is to purchase an extended warranty program, said Johnson. “The only expenses a company would have to cover during the extended warranty period are wear items and normal preventive maintenance. Any major maintenance expense would be covered under the extended warranty. However, before a fleet decides to invest in the extended warranty program, it needs to take a number of things into consideration, including the size of the fleet, vehicle replacement schedule, and the costs associated with the extended warranty.”

Agreeing is Tom Lynard, of purchasing for California Portland Cement Co. in Glendora, CA. “We have had some mechanical problems with our SUVs and vans, but since we negotiated an extended warranty program, our costs have been ‘nil.’”