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Today, technicians must manage repairs of increasingly sophisticated technologies involving advanced driver-assistance systems (ADAS) and electric vehicles, which are pushing repair costs higher. 

Photo: Canva/AF

We haven’t gotten away from the grease-stained mechanic’s uniform just yet. But the mechanic designation has been replaced by technician, as problems are diagnosed with computers more often than lifting the hood. As a result, vehicle maintenance has gotten much more sophisticated — and expensive.

In this Q&A, Automotive Fleet connects with Chris Foster, director of fleet management services at Holman, to look at current trends affecting fleet vehicle maintenance. 

Foster analyzes preventive maintenance, labor, ADAS technologies, and EV maintenance cost factors. He then offers tactics fleets can employ to improve maintenance practices and alleviate maintenance expense. 

AF: How are fleet maintenance costs trending? 

Foster: For the last 18 to 24 months, supply chain disruptions, labor shortages, and inflationary pressures have pushed maintenance costs significantly higher. In some segments of the industry and specific geographic regions, costs spiked as much as 20% during the first half of 2023. 

Fortunately, these conditions have stabilized recently, and maintenance costs have leveled off. Looking ahead, we're likely to see maintenance and repair costs continue to increase slightly in certain areas, but costs are unlikely to climb at the same rate as last year. 

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"The main driver of maintenance expenses in recent years has not been an increase in PM services but rather a spike in the costs associated with unexpected or catastrophic repairs," said Chris Foster, director of fleet management services at Holman.

Photo: Holman

AF: How do PM expenses today compare to previous years and moving forward? 

Foster: Specific to preventive maintenance (PM) services such as oil changes, tire rotations, and brake replacements, costs have not increased much during the last 12 to 18 months. Most repair facilities prioritize keeping these services as affordable as possible to help attract and retain customers. The main driver of maintenance expenses in recent years has not been an increase in these PM services but rather a spike in the costs associated with unexpected or catastrophic repairs. 

During the last two years, supply chain disruptions severely limited the number of new vehicles fleet operators have been able to order. As a result, older vehicles remained in service much longer than initially anticipated, requiring additional maintenance. 

The repairs occurring late in a vehicle's lifecycle are often much more significant and costly — engine replacements, transmissions, etc. In addition to the increase in labor rates and parts prices, it's easy to see how these expenses can spike quickly and drive overall costs higher. 

Mostly, OEMs have not significantly changed their recommended maintenance services or intervals in recent years. 

AF: How were labor rates in 2023, and do you foresee increases in 2024?  

Foster: Without question, North America has a critical shortage of qualified technicians, which continues to impact maintenance costs profoundly. As the number of technicians declines and demand grows, most maintenance vendors find themselves increasing wages to hire or retain technicians. This drives labor rates significantly higher and further amplifies the strain on maintenance budgets. 

After a relatively steady increase throughout 2022, labor rates peaked in January of 2023. Unfortunately, there's little relief to the technician shortage on the horizon, and we're likely to see labor rates continue to climb but at a slower rate than in recent years. This industry segment remains vulnerable to quick shifts and is an area we continue to monitor closely. 

AF: How is new technology impacting car maintenance now and in the immediate future?  

Foster: Today, sophisticated advanced driver-assistance systems (ADAS) such as collision mitigation, blind spot monitoring, and lane departure warning are standard equipment on many vehicle models. While this technology helps mitigate accidents and keep drivers safe, these systems include expensive components, pushing repair costs higher. 

For example, the windshield replacement cost in an ADAS-equipped vehicle is typically much higher than that of a non-ADAS unit. In addition to the increased cost of the windshield itself, the vehicle also often requires recalibration of the entire system, which is an additional cost factor. 

AF: How are electric vehicles impacting fleet maintenance?  

Foster: Another area we're monitoring is maintenance for electric vehicles. Currently, the relatively small volume of EVs in fleet operations is not dramatically moving the needle in either direction. However, the long-term implications of the continued transition to EVs are yet to be seen. 

Since EVs are typically much heavier than their ICE counterparts due to the weight of the batteries, we are seeing an increase in brake and tire wear. As a result, you'll likely have to replace brakes and tires more frequently, driving maintenance costs higher. 

Additionally, if an EV requires maintenance on its electrical system, it has to be serviced by the OEM (rather than a third-party maintenance vendor) due to the complexity of the technology and specialized training required. 

Fortunately, these repairs are often covered by the manufacturer's warranty. Still, if the unit is out of warranty, you'll likely pay higher labor rates at the OEM repair facility. 

AF: What are the critical maintenance trends today and moving forward?  

Foster: From a maintenance perspective, labor and parts shortages will remain a challenge for the foreseeable future. Additionally, many fleet operators are still working to normalize their replacement cycles after several years of limited new vehicle availability. 

You'll need to adjust your operating budget accordingly to account for variables such as increased downtime and higher maintenance costs. 

7 Tactics to Improve Fleet Maintenance 

In this environment of higher costs and continued strains on labor and parts supplies — and with many vehicles remaining in service longer than initially anticipated — Foster said fleets should consider these tactics to mitigate maintenance time and expense: 

  • Adhere to preventive maintenance schedules. 

With lifecycles extended, you'll want to review the services included in your PM schedules and, if necessary, add critical services that typically occur later in a unit's lifecycle. 

  • Use full-service repair facilities. 

Rather than quick lube locations, full-service facilities perform multi-point vehicle inspections that can help identify potential issues early and avoid catastrophic component failures. 

  • Review approvals on aged assets. 

You'll also want to thoroughly review the approval process for major repairs on your aged assets and consider whether the cost is warranted for older, higher-mileage vehicles. 

  • Review vehicle cycling and utilization strategies. 

In addition to proper preventive maintenance, strategic vehicle cycling is your best defense against escalating maintenance costs. While you may not be able to acquire all the new vehicles your business needs to replace all your aging units (whether due to supply or budget constraints), you'll want to be strategic about how you deploy the units you can acquire. 

There are a variety of factors to consider. While replacing your oldest, highest mileage vehicles may be the best approach, you also need to be mindful of each unit's role in supporting your business. 

Carefully examine how the vehicles in your fleet are utilized; there may be opportunities to position your newest, most reliable vehicles in business-critical roles while shifting the units being replaced to other areas of your fleet, creating a cascade effect that cycles out these older vehicles over time. 

  • Hold drivers accountable for maintenance. 

We recommend having a robust driver policy that requires drivers to regularly inspect vehicles and report any issues immediately — check engine lights, irregular tire wear, odd noises, etc. 

Additionally, ensure that fleet drivers adhere to recommended PM schedules so minor repairs are proactively addressed before they balloon into a more significant issue. 

  • Use telematics to improve maintenance practices. 

We also continue to see more fleet operators embrace telematics and leverage the technology from a maintenance standpoint. Telematics delivers increased visibility to essential information such as vehicle use and performance, including diagnostic data, allowing you to address maintenance issues proactively. 

  • Manage vendors for volume pricing. 

As costs continue to rise, fleets need to emphasize maintenance vendor management. We always advise our customers to align with full-service, national account vendors to optimize their maintenance strategy. 

Through these strategic partnerships, your vendors become familiar with your vehicles and operating parameters, helping you quickly get back on the road to minimize downtime. You can also often leverage this relationship for volume pricing to help mitigate rising costs. 

About the author
Chris Brown

Chris Brown

Associate Publisher

As associate publisher of Automotive Fleet, Auto Rental News, and Fleet Forward, Chris Brown covers all aspects of fleets, transportation, and mobility.

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