Maintenance Costs: How High Is Too High?

Every fleet manager's boss has said, "Our maintenance costs are too high." Just what does "too high" mean? What are reasonable maintenance and repair costs?

If you tried to compare your costs to other companies' costs, an apple-to-apple comparison might be difficult. Industries, policies, and fleets differ considerably in cost, and so do their recordkeeping methods. Therefore, you should compare your own fleet locations with each other or your own driver records within the separate locations.

Possibly, you already know what you are spending per location, but it would be wise to cumulatively determine what each fleet location is spending for a few important maintenance/repair categories such as:

1. Engine.
2. Transmission.
3. Brakes.
4. Tires and tire repairs.
5. Collision costs not recovered.
6. Preventive maintenance.
7. All other.

How can this be accomplished? One way is to use the services of a fleet management company, which might cost $6 per month per vehicle. If you have 500 vehicles, maybe you don't want to spend $36,000 a year.

To achieve the same results in-house, you can do the following:

• Have your branches code each cost item on an invoice by maintenance/repair category and vehicle number. For example, 1 = Engine, 2 = Transmission, and so forth. If one invoice includes both tire and preventive maintenance costs, show the dollar cost for each and code the expense to the appropriate category.
• Require each driver to send a monthly odometer reading. Keep cumulative mileage records by location.

Once you have these monthly figures, it is a simple matter of calculating cumulating cost per mile for each category of cost. You can then compare locations and give facts to the managers or regional managers of the locations involved. Then, if one fleet location has a horrible record compared to the average fleet, it will be apparent. Only then can the local manager say, "Our maintenance costs are too high."

This article was written by Al Willis, retired fleet manager for Sammons Communications in Dallas, TX.