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Overall Fleet Car Maintenance Costs Remain Flat in 2010-CY

A decrease in average tire expenses helped offset slight cost increases for higher frequency of repairs and preventive maintenance.

March 2011, by Mike Antich - Also by this author

In calendar-year 2010, overall fleet car maintenance costs remained flat compared to 2009-CY. This is in contrast to the increased maintenance costs experienced in the 2009 calendar-year caused by deferred vehicle replacements.

"Commercial vehicle orders were up in 2010, driven by pent-up demand and a very strong resale market. Vehicle replacement in 2010 helped stabilize maintenance costs that had significantly increased during 2009," said Chad Christensen, strategic consultant for GE Capital Fleet Services.

The return to more traditional replacement cycling will ultimately help lower maintenance expenses.

"Decreased average tire expenses in 2010 helped offset the slight cost increases for maintenance repairs and preventive maintenance resulting from fleets replacing older, higher-mileage vehicles after delaying normal replacement cycles," said Christensen. "The 2010 total maintenance spend, though, was 13 percent higher than 2008 costs, likely indicating it may be a long road back (if ever) to reduced expenses and pre-2008 vehicle replacement cycles."

These were among the key findings of the 16th annual fleet passenger car maintenance study conducted by GE Capital Fleet Services, a fleet management company headquartered in Eden Prairie, Minn. The GE study is based on a survey of actual maintenance expenses incurred by 11,112 passenger cars during the 12-month period from Jan. 1-Dec. 31, 2010.

Extended Replacement Cycling Increases PM Costs

One area fleet operating costs increased was preventive maintenance, which experienced higher costs in 2010 compared to 2009.

"Preventive maintenance costs rose again in 2010 compared to 2009 and were 9 percent higher per vehicle when compared to 2008," said Eric Strom, maintenance & safety product manager for GE Capital Fleet Services. "The average cost per individual oil change service increased slightly year-over-year and was 10 percent higher ($3) since 2008. There were no significant changes in OEM-recommended oil drain intervals in 2010, but that is already changing as a result of the new oil standards."

Automakers are switching to new engine motor oils for improved fuel efficiency and engine protection. General Motors' cars and trucks are being built with their own new-generation Dexos oil. Other OEMs, such as Ford and Chrysler, are also beginning the switch to a new oil standard known by its industry grading of GF-5.

"These new oils are designed to help engines run more efficiently and better protect them from wear. The protection properties of the new oils also have the potential environmental benefit of increasing the mileage interval between recommended oil changes," said Strom. "Ford is specifying oil change intervals up to 10,000 miles with the new oil, while GM is relying on driving conditions and its oil life monitoring system. As it has with previous engine oil specification upgrades, GM is expected to adjust its oil life system to account for the new oils in the coming years."

One consequence of the increased prevalence of oil change monitoring systems is that they have extended actual oil drain intervals for vehicles equipped with these systems.

"This can be a challenge when a repair provider applies a 3,000-mile window decal," said Strom. "The new oil standards and oil monitoring system technology are a major industry culture shift for some fleets moving from a fixed mileage interval to a smart oil change indicator."

Limited availability of the new motor oil could initially pose a challenge, and the new standards may be confusing to drivers and repair providers.

"Most repair providers are ready to provide GF-5, but OEM-unique motor oils may be more difficult to find early on outside dealer locations. In addition, the oil filters may be initially available only at dealers due to their new unique designs," added Strom.

Early pricing for the new oils indicated GF-5 was about 15 percent higher per service and $2 to $3 more per additional quart, but these prices are coming down.

"GM's Dexos early pricing is higher on a per-service price basis, so GM fleets may see higher oil change costs until GM extends the oil change intervals," said Strom. "This may be a strong motivator for fleets with 2011 GM vehicles to adopt their oil life monitoring system as the recommended oil  change indicator."

Dexos oils will be required on GM's 2011 model-year vehicles. "The Dexos synthetic blend oils will have 'backward compatibility' and will be okay to use on earlier model-year vehicles," explained Strom. "Improved fuel economy is the key driver in the changes. Other benefits cited include less oil deposits, extended oil life, improved 'oil robustness,' and reduction of harmful emissions."

OEMs are also making changes to their scheduled maintenance programs that will impact maintenance expenses in future years. "Several OEMs are adding what were previously 'recommended' services to their 'required' maintenance service schedules," said Strom. "The OEMs are becoming more stringent that required services be completed on time. This has created more required service repair differences between OEMs and even within an individual OEM's model line-up. As a result, service schedules have become more complex, increasing the need for awareness among fleets."

One concern is that non-compliance with the OEM-required services may create service repair warranty issues and reduce post-warranty opportunities.

"Despite additional required OEM services, some service intervals such as oil changes and spark plugs are being extended. However, the extended intervals carry risks, as often these service inspections may be too late in catching under-inflated tires or under-hood issues," said Strom.

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