Maintenance costs are on the rise as vehicles accumulate higher annual mileages than in past years, according to the fifth annual vehicle maintenance study conducted for Automotive Fleet by US Fleet Leasing in San Mateo, CA. According to Mike Southwick, vice president of fleet management for US Fleet Leasing, average per-vehicle maintenance expenses on a cents-per-mile basis were higher in 1998 than the past year. The change is explained by the higher mileages that vehicles are accumaulating annually compared to last year. “Looking at the average miles per month and average annual miles of the vehicles in each of the mileage windows we studied, we are seeing a mileage increase of 5% to 32% for the vehicles in those windows, with the biggest hit occurring in the 0-36,000 mile range,” said Southwick. When vehicles accumulate mileage at a higher rate in a given year, they tend to hit more service intervals in that time, and may also incur additional maintenance expense as a result of accelerated usage. On the other hand, according to Southwick, overall lifecycle costs are down. “The good news is that when you look at a vehicle’s full lifecycle costing, rather than costs captured in specific mileage and time windows, the overall trend is down, as it has been for the last five years.” Reasons for that include:
A low inflation rate in 1998 helped keep a lid on the costs charged for parts and service.
Vehicles continued to be built better and were of a higher quality than predecessor models.
There was increased use of more durable components, such as platinum-tipped spark plugs and extended-life synthetic fluids, which have extended, or, in some cases, even eliminated certain preventive maintenance services.
John O’Donnell, director-fleet services for Wyeth-Ayerst Laboratories in Philadelphia, says his maintenance costs have increased over the past year. O’Donnell, whose fleet consists of 1,550 vans and 395 sport/utility vehicles, said he experienced more transmission and cooling problems in the past year. “But,” he added, “we had older vehicles last year that were in the higher-mileage range.” O’Donnell said that many of those vehicles have since been replaced in the December 1998 to February 1999 timeframe. Another factor that is putting upward pressure on fleet maintenance expenses is vehicle complexity. Nowadays, many vehicle-related problems, especially those that are elusively intermittent, have to be identified using sophisticated electronic diagnosis equipment, which results in increased service hour expenses. One interesting addition to this year’s study is the breakout of drive line repairs and maintenance costs. Previously, they were included under major mechanical. Drive line repairs include all transmission overhauls or replacements, as well as driveshaft components, and CV joints and boots. One way some fleets are influencing maintenance expenses is by limiting their overall fleet mileage. A case in point is Compaq Computer. Joe Poznick, director of car fleet global services for Compaq Computer in Maynard, MA, said his maintenance costs are down over the past year, because the prior year the fleet held the vehicles in service longer, to 65,000 to 70,000 miles. “This year, we went back to a 55,000-mile replacement cycle, and it made a difference in regard to maintenance costs,” Poznick said. He said the biggest cost savings was with tires and brakes.
Truck Expenses Remain Stable
On a per-incident basis, truck maintenance expenses are generally higher than car expenses. “One reason is that truck components are more expensive,” said Southwick. “For example, truck pads, rotors, and calipers are typically larger than the same components on cars.” In addition, truck applications are typically more severe than cars.”
Survey Methodology & Data Analysis Considerations
US Fleet Leasing provided the rolling expenses for 24,275 passenger cars and 13,216 light-duty trucks for 15 maintenance categories, broken out by mileage groupings, incurred between Jan. 1 and Dec. 31, 1998. When analyzing this data, it is important to keep in mind that vehicles were coming in and out of service throughout this 12-month study period. For example, in the under 36,000-mile range, some vehicles had fewer than 3,000 miles, while at the other extreme, other vehicles had mileages close to the 36,000-mile cutoff. Similarly, in the higher mileage range, many cars were taken out of service during the 12-month period prior to 96,000 miles, which was the high-mileage cutoff point in the study.
