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Maintenance CPM for Fleet Cars Declines 7.6% in 2001

February 2002, by Mike Antich - Also by this author

Although the average service life for fleet vehicles has been increasing, the improved quality of new passenger cars continues to drive down cents-per-mile (CPM) maintenance costs, which in the 2001 calendar year declined by 7.6 percent compared to the year prior.

This was the key finding in the eighth annual passenger-car maintenance study conducted by CitiCapital Fleet, a fleet management company headquartered in Carrollton, TX. The study was based on a survey of actual maintenance expenses incurred by 28,579 passenger cars from the period of December 2000 to November 2001.

The majority of maintenance expenses approximately 68 percent, on average, are spent on preventive maintenance, replacement tires, and brakes, said Mike Southwick, vice president of fleet management services for CitiCapital Fleet.

Although passenger car maintenance expenses have declined, Southwick cautions that the law of diminishing returns will eventually be reached. “There’s only so much expense you can take out of maintaining a car,” said Southwick.

One factor that will exert upward pres-sure on fleet maintenance expenses is the increasing complexity of new-model vehicles, and these complexities could cause vehicles to become more expensive to repair.

Four Reasons Why Passenger Car Maintenance Costs are Down

There are four factors contributing to the decrease in car maintenance expenses.

1. As mentioned earlier, passenger cars continue to be built better and are of higher quality than predecessor models, resulting in fewer component failures.

2. There has been stability in national account pricing during 2001. Even though retail labor rates have increased, national account pricing negotiated by fleet service companies has kept that increase from being reflected in fleet maintenance prices. “The cost for an oil change at many national account locations has stayed the same for a number of years,” said Southwick.

Also, there has been a proliferation in the number of vendors that provide national account service for fleets, and that has kept a competitive lid on prices. Examples of new fleet service providers include a growing number of franchised new-car dealers looking to service the ommercial fleet market, which will also serve to exert downward pressure on traditional national account vendors to stay competitively priced on routine maintenance and repair items.

3. There is increased flexibility by factories in providing for policy adjustments on vehicle repairs at the dealership at the time of repair.

4. Longer-life coolants and transmission fluids have reduced the per-incident and per-vehicle costs for these maintenance items. Also, there is increased use of longer life components, such as platinum tipped spark plugs, in newer model vehicles.

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