Latest Trends in Fleet Management – Maintenance Spend
June 07, 2012
By Angela Feerick, Director of Strategic Consulting for PHH Arval
As vehicles age, the cost to maintain them increases and the primary maintenance spend category changes. Additionally, over the past few years fleets have been retaining their vehicles beyond replacement policy guidelines, which has resulted in older fleets needing repairs that fall outside warranty coverage.
In the early years of a vehicle’s lifecycle, most expenditures are on preventative maintenance, brakes and tires. As vehicles age, the spend shifts to categories like transmissions, engines and electrical – transactions which occur less frequently but have a much higher unit cost.
Across all vehicle classes – excluding heavy vehicles – and years in services, the top five categories of spend are tires, engine, brakes, preventative maintenance and electrical. The percent spent in each category is impacted by years in service.
Top 5 Spend Categories 2010-2011
Years in Service 1-4:
Fleets are beginning to replace older vehicles. Repairs costs for newer vehicles often fall within the warranty coverage. In year 1, 60% of maintenance costs are for brakes, tires and preventative maintenance. By year 4, those costs are down to 40% as costs in other categories begin to increase.
Years in Service 5-9:
Vehicles that are held longer or beyond replacement policy tend to see a shift in cost categories. In year 5, only 35% of maintenance costs are for brakes, tires and preventative maintenance. By year 9, those costs are down to 26%.
Focusing on these top 5 maintenance categories, we have also observed a year-over-year increase in the average cost per transaction and see a slight continuation in 2012.
Average Cost per Transaction (thru Q1 2012)