The Car and Truck Fleet and Leasing Management Magazine

Fleet Car Maintenance Costs Increase 5% in 2008

Replacement tire costs rose 5 percent and labor rates increased 3-4 percent in 2008-CY. Although extended OEM warranties protect powertrains against catastrophic failures, expanded maintenance requirements may increase cost.

March 2009, by Mike Antich - Also by this author

For complete article, including charts, click here.

Overall fleet car maintenance costs rose 5 percent for the 2008-calendar year compared to 2007, primarily due to increased prices for replacement tires and higher labor rates.

These were among the key findings of the 14th 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 70,374 passenger cars during the 12-month period from Jan. 1 to Dec. 31, 2008.

 One key reason for the increase in car maintenance expense was the increase in replacement tire costs. "Tire replacement costs rose more than 5 percent in 2008 driven by tire companies' price increases and more expensive larger wheel sizes," said Eric Strom, product manager maintenance & safety solutions for GE Capital Solutions Fleet Services.

One factor that helped mitigate the increase in maintenance expense in 2008 was a reduction in brake repair costs.

"This helped hold maintenance costs to slightly over a 5 percent increase," said Mark Lange, customer fleet specialist, CAFM, for GE Capital Solutions Fleet Services. "Brake repair costs were down in all categories for nearly all mileage bands. The replacement market's more widespread use of ceramic brake pads has helped control fleets' brake repair costs.  The greater availability and lower costs of ceramic pads has led to their increased usage. This is great news, as brakes are traditionally one of the top three automobile expense areas behind tires and preventive maintenance," added Lange.

PM Costs Remain Flat

Overall preventive maintenance (PM) expenses remained flat in calendar-year 2008 compared to 2007.

"PM costs per incident remained flat in 2008 as repair facilities held off any significant price increases to help drive repair order traffic," said Strom.

Not only were PM costs flat, but the PM incident rate also decreased in 2008.

"The incident rate decreased more than 20 percent compared to 2007 as fleets increased adoption of extended oil change intervals recommended by several OEMs and oil life monitoring systems," said Lange. "In 2008, fleets experienced fewer PM repair shop visits, less driver downtime, and lower overall PM costs."

However, Strom foresees a price increase for oil changes in 2009. "We expect to see a 5-10 percent increase in the cost of individual oil changes. But the overall PM costs will be offset for some fleets with extension of their oil change intervals," said Strom.

Tire Expenses Up 5 Percent

Tires are typically the second-highest maintenance expense category for car fleets. Tire expenses continued to increase in 2008, on top of  earlier price increases in 2007. One reason for increased tire expense was a series of price hikes throughout 2008 by tire manufacturers in reaction to the higher cost of oil, a key ingredient in manufacturing tires.

"Tire replacement costs for 2008 were up over 5 percent in 2008 compared to 2007, although the average tire lifecycle costs per vehicle held fairly steady. This may be attributed to tire pressure monitoring systems (TPMS)," said Lange.  "TPMS was required on all passenger cars, light trucks, and vans by the National Highway Traffic Safety Administration (NHTSA) starting in model-year 2008. Due to a phase-in of the requirements, 20 percent of model-year 2006 and 70 percent of model-year 2007 vehicles are equipped with TPMS, according to NHTSA."

Another factor leading to higher tire costs is the trend to larger 17- and 18-inch wheel sizes. "The larger tire and wheel diameters offered by many auto manufacturers is another key driver, besides petroleum, of the increase in tire cost," said Strom. The larger the tire, the more expensive the replacement tire.

However, despite major increases in the price of retail replacement tires, the price increases for national account tire programs were lower than retail.

"The national account major tire providers recognize the importance of fleet business and their fleet management tire price increase percentages were less than their retail increases in 2008," said Lange.

Another consequence to larger tire sizes is that replacement tires are not immediately available, especially on all-new models. "The auto manufacturers have introduced new tire sizes on individual models, and this poses challenges for tire providers and fleets. The replacement tires may be limited initially to one tire manufacturer, may be more expensive, and are frequently not readily in stock," said Strom. "This has occurred on popular fleet vehicle models with OEM tires that are not major brands. Compounding this replacement tire shortage is the OEM requirement that tires sizes should not be changed when replacing the original tires."

Twitter Facebook Google+


Please note that comments may be moderated. 
Leave this field empty:

Fleet Incentives

Determine the actual cost of owning and running a vehicle in your fleet. Compare vehicles by class and model.

Sponsored by

With its divisions Mercedes-Benz Cars, Daimler Trucks, Mercedes-Benz Vans, Daimler Buses and Daimler Financial Services, the Daimler Group is one of the biggest producers of premium cars and the world’s biggest manufacturer of commercial vehicles with a global reach.

Read more

Up Next

More From The World's Largest Fleet Publisher