The Car and Truck Fleet and Leasing Management Magazine

Fleet Car Maintenance Costs Remain Flat in 2011-CY

There has been an ongoing trend toward flat maintenance costs for the past three years. A number of fleets replaced vehicles early to take advantage of the strong resale market in the 2010 calendar-year, which helped keep a lid on preventive maintenance costs for CY-2011, as the average age of fleet vehicles in operation decreased with an increased number of older units taken out of service.

March 2012, by Mike Antich - Also by this author

There has been an ongoing trend toward flat maintenance costs for the past three years. A number of fleets replaced vehicles early to take advantage of the strong resale market in the 2010 calendar-year, which helped keep a lid on preventive maintenance costs for CY-2011, as the average age of fleet vehicles in operation decreased with an increased number of older units taken out of service.

“Overall, fleet car maintenance costs decreased slightly compared to 2010 calendar-year. In 2010, a strong resale market drove replacement orders, which helped prevent maintenance costs from rising during 2011,” said Eric Strom, maintenance & safety product manager for GE Capital Fleet Services.

However, the average cost of tires and oil change transactions increased in 2011, but were offset by the decrease in the average cost for repairs. “In 2011, overall spend declined 4 percent on a cost-per-vehicle-per-month basis and 6 percent from a cost-per-mile standpoint,” said Strom. “The fleet portfolio data showed several other indicators influenced by the shift to more frequent vehicle cycling as there was a decrease in the average odometer reading and months in service.”

These were some key findings of the 17th annual fleet passenger car maintenance study conducted by GE Capital Fleet Services, a fleet management company headquartered in Eden Prairie, Minn. The study is based on actual maintenance expenses incurred by 13,318 passenger cars from Jan. 1 to Dec. 31, 2011.

Oil Change Expenses Raise PM Costs

One area in which fleet operating costs increased was preventive maintenance.

“Preventive maintenance costs increased in 2011 as the average cost per individual oil change service rose 6 percent, or $2,” said Strom. “However, costs were flat on an average cost-per-mile and cost-per-month basis as the OEM policies for extending oil change intervals are favorably impacting costs.”

Automakers are switching to new engine motor oils for improved fuel efficiency and engine protection. General Motors’ cars and trucks are being built to use Dexos oil. Other OEMs, such as Ford, are also beginning the switch to the GF-5 oil standard.

“The new motor oil specifications are designed to improve engine life and performance and enhance fuel efficiency,” said Strom.

The new oils have been touted by the oil industry as having superior protection properties, which will allow increased mileage intervals between recommended oil changes. This was borne out in data collected by GE Capital Fleet Services. “Between 2010 and 2011, the average months between an oil change shifted from 3.2 months to 3.5 months and the average miles interval went from 6,312 miles to 7,026 miles,” said Strom.

However, unintended consequences have resulted from switching to new motor oils.

“These new oils, such as GM’s Dexos and the industry grading of GF-5, can be confusing and repair providers need to ensure the correct oil specification is matched to the vehicle year-make-model,” said Strom. “We have seen some providers moving away from stocking conventional oil and carrying semi- and full-synthetic oils only to simplify inventories and reduce the complexities of oil choices.”

Although the new motor oils are more expensive, these costs, so far, are not being passed on to fleet customers.

“Many repair providers are menu pricing the service and not charging a bottle upcharge despite the additional cost of these new oil specifications. Individual oil change costs requiring the new oil specifications are stabilizing at the national account providers and are often packaged with other commonly required OEM services, such as tire rotation and brake inspection,” said Strom.

Another factor cited by Strom that is contributing to extended oil drain intervals is the increased prevalence of onboard oil change monitoring systems on a growing number of new models. “More fleets with passenger and light trucks are adopting the oil change monitoring systems to take advantage of the extended oil drain intervals,” added Strom.

However, the forecast for the 2012 calendar-year is for oil change costs to increase.

“Oil change costs on a per-transaction basis will increase, even with repair provider pricing specials, but, overall costs per mile will remain flat as the average mileage interval is extended between oil changes,” said Strom.

An ongoing trend has been for franchised dealers to enter the fleet “quick lane” oil change market. “Many OEM dealerships have developed express lanes to gain more service business. Chrysler Group dealerships are expanding Mopar Express Lane services beyond the 600 dealers currently offering this service, which includes oil changes and preventive maintenance checks,” said Strom.

According to Jeff Levin, Mopar regional fleet service manager, Chrysler plans to offer Saturday service hours at 80 percent of its dealers by the end of the 2012 calendar-year, plus offer one-stop service for customers who have competitive makes.

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  1. 1. Rich Hamilton, Account Ma [ April 02, 2012 @ 05:17AM ]

    It's nice to see this Industry Magazine using GE Capital Fleet Services Maintenance Data and displaying it in visual bar chart. It makes reading the article more informative.....thanks for the partnership as this is important detail in helping the Fleet Administrator control costs.

 

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