The Car and Truck Fleet and Leasing Management Magazine

Tire & PM Costs Increase Car Maintenance

March 2008, by Mike Antich - Also by this author

Car maintenance costs for 2007 were slightly higher compared to 2006. Higher tire costs were a key factor as tire companies raised prices. Individual fleet policies for off-brand replacement tires were unable to offset these overall tire increases. Brake repair costs were down for most mileage ranges as OEM new brake quality provided fleets longer brake life.

These were among the key findings of the 13th annual fleet passenger car maintenance study conducted by GE Capital Solutions Fleet Services, a fleet management company headquartered in Eden Prairie, Minn. The GE study was based on a survey of actual maintenance expenses incurred by 44,689 passenger cars during the 12-month period from Jan. 1 to Dec. 31, 2007.

PM Costs Increased 10 Percent in 2007-CY

Preventive maintenance costs have also been impacted by the OEM decision to recommend a blended synthetic oil to reduce engine wear and increase fuel economy.

"The cost of preventive maintenance was up 10 percent over 2006. The extended OEM intervals and oil life monitoring systems were not enough to offset the increased costs of more expensive oil, semi-synthetic costs, larger crankcase capacities, and some unique requirements like 5W-20," said Eric Strom, maintenance product manager for GE Capital Solutions Fleet Services. "This rise in PM costs for 2007 differs from the 2005-2006 studies, which showed that PM costs had remained fairly flat."

Fleets are becoming more receptive to adopting longer oil drain intervals for vehicles equipped with an OEM oil monitoring system. "These new systems have dashboard indicators that alert drivers when an oil change is due. The fleet driver may have been accustomed to following a pre-established normal service schedule. The cost impact could be a positive or negative for a fleet," said Mark Lange, technical specialist for GE Capital Solutions Fleet Services. "Those fleets using a 3,000- to 6,000-mile oil change interval today may find that servicing may not be required for 7,000, 8,000, 9,000 or more miles. Other fleets operating cars with a 5,000- to 7,500-mile normal service schedule today may find the dashboard indicator requires more frequent servicing, adding to their preventive maintenance costs."

Another factor influencing higher maintenance expenses in 2007 is increased labor rates. "Labor rates continue to rise in the automotive service industry and will likely continue as other consumer goods rise, too," said Strom. "Repair facilities cannot absorb the internal expenses of doing business and labor rates are often targeted. These expenses have contributed to a 4- to 5-percent increase in parts and labor pricing."

Extended Powertrain Warranties to Cut Costs

During the 2007 calendar year, there were no major OEM changes to scheduled maintenance that would have impacted 2007 costs. "The OEM maintenance schedules were already extended for spark plugs, drive belts, coolant, and transmission services," said Lange.

However, OEM extended powertrain warranty programs should help decrease car maintenance expenses going forward.

"Fleets should be in a good position to reap the benefits of OEM extended powertrain warranty coverage in 2008 and beyond," said Strom. "Fleets with Chrysler car products and their lifetime powertrain coverage, as an example, may see a 3- to 6-percent yearly powertrain expense reduction. Fleets have expressed greater confidence in OEM product quality when they see new extended coverage announcements," added Strom.

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