Replacing a fleet vehicle's engine can sometimes be more cost-effective than purchasing a new vehicle. 
 -  Photo via  E60 Forums /Wikimedia.

Replacing a fleet vehicle's engine can sometimes be more cost-effective than purchasing a new vehicle.

Photo via E60 Forums/Wikimedia.

In some cases, engine replacement is a viable alternative to acquiring a new vehicle. It can be done for a fraction of the cost, plus you avoid taxes, license fees, and insurance expenses that are incurred in vehicle replacement.

Replacing an engine can save money and extend vehicle life. Here are four factors to consider:

  • Any vehicle that is otherwise in sound overall mechanical condition and is planned to be in service for several more years is a good candidate for engine replacement.
  • Engine replacement offers savings in taxes, license fees, and insurance costs
  • Replacements can be done at a set interval or at the time of engine failure.
  • Remanufactured engines should last as long as the original engine, effectively doubling the service life of the vehicle.

Vehicle replacement cost is among the biggest expenses facing managers of all types of fleets. However, a viable alternative to buying a new vehicle, in some cases, is engine replacement, which can save thousands of dollars per vehicle. Depending on the size of your fleet, that could amount to enormous annual savings.

In addition, an engine replacement offers savings in taxes, license fees, and insurance expenses that would otherwise be incurred in buying a new vehicle. Also, rather than the four- to seven-year depreciation cycle of a new vehicle, engine replacements can be depreciated in the same year.

For the purposes of this article, engine replacement is defined as the removal of the original engine and replacement with a new, rebuilt, or remanufactured engine.

When considering engine replacement, one factor is the intended lifecycle of the vehicle in question. If the vehicle is planned to be in service for another three to five years and is in good overall condition, it is a good candidate for engine replacement.

Replacement Intervals: Reactive or Proactive?

When is the right time to replace an engine? One school of thought is the reactive method, which is to replace it at the time of engine failure.

"Typically, we do [engine] replacements when the engine fails," said Duane Walker, plant manager for Eddins-Watcher Co., a petroleum distributor based in Odessa, Texas.

The company performs eight to nine engine replacements in a typical year for its fleet of approximately 200 vehicles.

The other method is planned replacement at a specific mileage, regardless of whether the engine has experienced a failure or major breakdown. The proactive method offers other savings in engine-related maintenance costs, since the related parts receive less ancillary wear.

"We found that if you are proactive in replacing engines, you won't spend more in the long run, although your initial expense may be more," said Bob Haddox, director of transportation for Tulsa Public Schools, which routinely replaces engines to extend vehicle service life in its fleet of 600 trucks, buses, cars, and maintenance vehicles.

With planned replacements, it's a good idea to schedule them during slow times of the year, since a typical replacement requires 14 to 22 hours of labor time. This is an addition to the time it takes to order and ship the replacement engine.

Replacement Engines Should Last as Long as the Original

Once a vehicle has undergone an engine replacement, it should be able to last at least as long as the original engine, provided the other systems are all in sound mechanical condition. For example, if an engine was replaced at 150,000 miles, its replacement should be expected to last for another 150,000 miles if it is properly maintained.

In some cases, remanufactured engines offer increased performance over new factory engines of the same model and size. Some companies, such as Jasper Engines and Transmissions, a national supplier of rebuilt engines, make modifications which it says improves the performance and durability of engines.

Rebuilt or Remanufactured, What's the Difference?

The term "rebuilt engine" refers to any engine that is removed from the original vehicle, repaired, and replaced in that vehicle or any other vehicle. Unfortunately for the consumer, there are no specific standards for what type of repairs are done to a re-built engine. Some companies may only do necessary repairs, such as replacing damaged pistons or valves; others may make more through changes, such as replacing all pistons and valves.

The term "remanufactured engine" refers to a used engine, or "core," which has been completely overhauled to "like-new" condition, including the replacement of all parts such as valves and pistons, and the removal and reconditioning of all parts. In terms of function, it is the equivalent of a new engine.

"With a remanufactured product, you have the benefit of hindsight," said Mike Pfau of Jasper Engines. "When these original engines were designed and built, they were designed and built in a certain manner. When they get into service, there may be things that have failed, which did not hold up as well, that experience and history can teach us. So we as manufacturers will look at those areas, and we'll make modifications that will improve the overall performance and durability of the engine."

Typical modifications include replacing the intake valves with sodium-filled valves; replacing exhaust valves with stellite exhaust valves; putting in a hardened crankshaft; installing hyper-eutectic pistons; installing chrome-molly piston rings; adding a Teflon rear seal; installing chrome-plated valve stems; and installing graphite-coated pistons. The addition of high-performance parts, which are more resistant to heat and friction, increases engine performance and durability. Though these types of remanufactured engines are somewhat more expensive, they offer cost savings in maintenance and vehicle downtime in the long term.

When searching for replacement engines, fleets have to consider engine quality and durability, and the type of warranty provided, as well as how long the company has been in business. What do its other customers say about the product? What parts does it automatically replace, and are there parts that it will not, and why? Do they test them? Those are all criteria that fleet managers need to look for in order to shop for the best value.