Welcome to Fleet Data Depot, a new regular feature for Automotive Fleet. Fleet Data Depot provides quick snapshots of information, trends, and analysis relevant to the fleet market.
In our very first Fleet Data Depot, the total cost of ownership experts at Vincentric have supplied two graphs that illustrate the changes in per-mile ownership costs for fleets over the previous calendar year.
The analysis is based on 20,000 miles per year for a three-year window. For the analysis, Vincentric calculated its standard eight cost elements: depreciation, financing, fees and taxes, fuel, insurance, maintenance, opportunity cost, and repairs.
The charts reveal in data form the widely held assumptions on TCO trends — that is, costs per mile have increased in every segment.
Those cost increases are the result of a few factors: Average new vehicle transaction prices hit another record high in December of $49,507, an increase of 4.9% from a year ago. At the same time, wholesale prices have been on the decline for the second half of 2022. As a result, depreciation has risen across the board.
Additionally exacerbating depreciation, higher vehicle prices also drive higher financing costs, and this year’s higher interest rates also contributed to higher costs.
Rising Fuel Costs
As fuel is the second highest cost in the TCO equation, the rise in fuel costs have negatively affected per-mile averages. The fuel price spike to start the summer likely correlates to the greater rise in TCO in June, with deflating fuel prices contributing to a softening in per-mile costs starting in September.
Note how fuel costs have impacted different segments to varying degrees: for cars, which have the best fuel economy of the segments depicted, the peaks and valleys were not as pronounced. For luxury vehicles — particularly luxury SUVs — the differences were more radical.
Does the rise in TCO for 2022 mirror what is shown in Vincentric's data? Let us know your experience in the comments!