The Car and Truck Fleet and Leasing Management Magazine

Fleet Replacement Cycles Remain Steady

May 08, 2009

TORRANCE, CAAn Automotive Fleet study on fleet vehicle depreciation expenses revealed replacement cycles for several segments appeared to remain steady since 2005. The information is based off data supplied by Automotive Resources International, GE Capital Solutions Fleet Services, LeasePlan USA, PHH Arval, and Wheels Inc. from 2005 to 2008 of more than 1.5 million vehicles.

Out of six segments (compact cars, intermediate cars, minivans, full-size vans, trucks, and sport utility vehicles), months in service and monthly deprecation costs in cents per mile (CPM) figures for intermediate cars experienced little change, dropping slightly over the years. In 2008 and 2007, average months in service for the intermediate car segment were 29 (56,579 miles for 2008; 60,030 miles for 2007), down from 30 (65,490 miles) in 2006, and 31 (59,550 miles) in 2005. While average monthly mileage for this segment fluctuated over the past four years, monthly depreciation costs in cents per mile (CPM) also decreased annually — falling from 22 cents in 2005 to 16 cents in 2008.

Replacement cycles for the sport utility vehicle segment stayed the same for 2008 and 2007 at 29 average months in service (83,556 miles in 2008; 70,959 miles in 2007); however, the replacement term rose from 31 months (75,981 miles) in 2005 to 32 months (70,560 miles) in 2006.

The most significant change occurred in replacement cycles for the truck segment, with fleets keeping trucks in service nearly one year longer in 2008 than in 2007. The full-size van segment followed suit, with vehicles remaining in service nearly six months longer in 2008 than in 2007.

Compact car and minivan average months in service fluctuated from 2005 to 2008, with the differences ranging from two to four months.

Depreciation expenses for 2008 will be featured in the upcoming 2009 Automotive Fleet Fact Book, to be released this summer.

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