Fleet Car Maintenance Costs Increase Less Than 1%

Overall, passenger car maintenance costs per unit increased less than 1 percent in calendar-year 2015. These costs include unscheduled repair services, preventive maintenance (PM), tires, and replacement rentals.

In particular, there were five fleet car maintenance trends that were the primary influencers of maintenance costs in calendar-year 2015, which are identified by Chad Christensen, strategic consultant, and Frank Stracke, case manager, managed maintenance, both of whom work for Element:

• Inconsistent tire size labeling, which has resulted in under-load tires being installed.
• Smaller, higher output turbocharged engines, which haven’t resulted in increased repair costs.
• Continued adoption of lower viscosity motor oils and variation between vehicle models.
• Recurring repair issues with an OEM, often resulting in more downtime, parts delays, and rental costs. The trend was prevalent across a single vehicle model, but differed by engine type. Analytics revealed these trends for OEM escalation.
• Parts delays due to non-preventive maintenance repairs and re-engineered parts, creating driver frustration and rental delays.

At a Glance

● Vehicle-build quality continues to remain high, which is helping to
stabilize maintenance costs.
● Labor rates increased in 2015.
● Continued adoption of lower viscosity motor oils.
● Parts delays due to non-preventive
maintenance repairs and re-engineered parts.
● Inconsistent tire size labeling which has resulted in under-load tires being installed.

These were some of the key findings of AF’s 21st annual fleet passenger car maintenance study conducted exclusively by Element, a fleet management business headquartered in Sparks, Md., and Eden Prairie, Minn. The study was based on actual maintenance expenses incurred by 37,627 passenger cars during calendar-year 2015. This three-part report examines the survey results in separate articles focusing on overall car maintenance trends, extended service intervals, and passenger car replacement tires.

Costs Up Slightly in CY-2015

Overall, fleet car maintenance costs per mile for the 2015 calendar-year were up slightly compared to those in the 2014-CY.

One reason for the slight increase was that labor rates increased in 2015, a continuation of a similar trajectory from 2014. But, the forecast is for labor rates to remain flat in calendar-year 2016. 

“We have seen repair-provider labor rates increase across the board from national accounts to independents to dealerships. We expect 2016 labor rates to remain flat in metropolitan areas after the 2015 increases,” said Stracke.

While overall vehicle quality continues to be high, there were several popular fleet vehicles that experienced greater-than-normal maintenance issues. “Several new-model introductions have had early service repair issues, making it challenging for shops to diagnose and required escalation directly to the OEM engineers,” added Stracke.

Maintenance Cost Analysis

Vehicle-build quality continues to be high, but several key maintenance areas witnessed cost increases in 2015. “For instance, we have seen significant cost increases with replacement windshields because of collision avoidance and other embedded glass technology,” said Stracke.

This observation was echoed by Christensen. “The cost of outside mirror replacements has increased due to the integration of collision avoidance technology into the mirrors,” he said.

Other findings identified transmission issues that influenced 2015 maintenance costs, such as OEM-specific fluid replacement requirements. “For instance, transmission failures have occurred in CVT transmissions when not using transmission fluid specifically for CVT-type transmissions. Some non-OEM repair providers have struggled with these new requirements,” said Stracke.

Roadside Assistance Trends

The top five roadside assistance trends were identified by Jason Jones, specialty vehicle manager for Road America. They are:

• Towing.
• Tire change.
• Jumpstart
• Lockout.
• Fuel/fluid delivery.

Here are four recommendations from Jones on how fleet drivers can help minimize roadside incidents:

• Have drivers adhere to a routine preventive maintenance program.
• Conduct pre- and post-trip driver inspections to visually inspect belts, hoses, battery(s), and the undercarriage of the vehicle for any leaks. 
• Perform a daily check of tire pressure and fluid levels.
•  Have drivers report any vehicle drivability issue immediately to the appropriate department.

Fleet managers must instruct drivers to keep roadside assistance and accident policy in the vehicle at all times. One way to expedite roadside assistance is for fleet drivers to have the following information ready to give to the dispatcher when calling for assistance:

• Type of service needed.
• Exact location of the vehicle.
• Year, make, model, and color of vehicle.
• Vehicle weight and whether it is loaded or unloaded.
• Any modifications to the vehicle, such as utility bed, box truck, etc.
• Any safety concerns related to the location of vehicle.
• Roadside assistance or accident policy number.

If a vehicle is disabled on the side of the highway, Jones recommends that the fleet driver pulls the vehicle to the right shoulder, as far away from traffic as safely possible. Once the vehicle is safely stopped, turn on the hazard lights and set the parking brake. At this time, a driver can call the dedicated roadside assistance phone number.

Until assistance arrives, the driver should stay in the vehicle at all times. If the driver must get out of the vehicle, instruct him or her to exit only from the passenger side of the vehicle. Do not stand by the roadway.

An ongoing issue is the continuation of parts shortages experienced in prior years, which has lengthened turnaround time as vehicles sit idle waiting for replacement parts to arrive. “Back-ordered parts continue to be an issue, creating repair cycle delays, rental costs, and driver inconvenience,” said Christensen.

Similarly, the ongoing technician shortage continues to impact vehicle downtime. “The lack of specialty trained repair technicians has posed problems resolving drivability and complex diagnostic repairs,” added Christensen.

Technology Enhancements Increase Windhshield Costs

Vehicle glass replacement costs are increasing as more technology, such as advanced driver assistance systems (ADAS) are being incorporated into windshields.

The windshield is a critical safety component of a vehicle, protecting passengers in the event of a rollover and aiding in proper airbag deployment.

What has changed in recent years is that windshields are becoming more integrated with the rest of the vehicle, incorporating features designed to aid with safety, comfort, and style.

Some examples of windshield enhancements and connectivity to other features are offered by Mark Klein, strategic account manager for Safelite AutoGlass.

“One important development has been the integration of adaptive cruise control, lane departure warning, and forward collision warning into windshields. These – and many similar features – fit into the category of advanced driver assistance systems, a growing trend among automakers to increase safety and assist the driver,” said Klein. “This technology uses a combination of sensors, such as radar and LIDAR, and cameras to create a ‘circle of safety’ around the vehicle. Because the ADAS systems are often located at the upper, inner surface of the windshield, many automakers state that the camera systems must be recalibrated after a windshield replacement.”

How common is the need for recalibration? At Safelite AutoGlass, windshields requiring a recalibration make up a little less than 5 percent of the windshields it replaces. “But, this number has grown significantly, though, from 0.05 percent in 2009, to 0.54 percent in 2013, to nearly 4 percent in 2015. According to Specialty Analytics, the ADAS market is expected to increase at a compound annual growth rate of 23 percent. This means nearly 10 percent of vehicles may require recalibration by 2019 and 90 percent by 2029,” said Klein. “As the percentage of vehicles using ADAS technology increases, the need for recalibration will make a significant impact on vehicle glass service and pricing.”

Some leading glass companies have begun alerting customers whose vehicle may require recalibration. “Still, it’s a good idea to ask when scheduling service or when the technician arrives to do the work. Some car dealerships have the equipment required to conduct a recalibration, while some vehicle glass companies are beginning to implement recalibration services for convenient, one-stop shopping,” said Klein.

ADAS windshields cost substantially more than their predecessors. Not only is there a cost associated with recalibrations, but the actual windshields cost more to manufacture due to their complexity. “Auto insurers typically view the recalibration as a part of the windshield replacement claim,” said Klein.

Windshield recycling makes windshield replacement a more sustainable solution. “Because windshields are constructed of two pieces of glass and a polyvinyl butyral (PVB) interlayer for safety, it is difficult to separate and recycle all of the components. While some companies have recycled only the glass portions for years, a handful are now recycling the PVB. Products made from recycled windshields include fiberglass insulation, carpet backing, and paint. When choosing a glass shop, it’s important to ask if the company recycles the entire windshield,” said Klein.

Maintenance Cost Forecast

The forecast is that fleet car maintenance expenses will increase in 2016.

“We expect maintenance expenses to rise 2 to 3 percent, driven by parts prices, continued shop technician shortages, and new-model OEM-only parts availability issues,” said Christensen.

Top 5 Maintenance Trends for Medium-Duty Truck Fleets

The top five maintenance trends for medium-duty and light-duty truck fleets are identified by Frank Stracke, case manager, managed maintenance for Element. They are:

• DEF (diesel exhaust fluid)-related repair failures. One of the challenges is getting drivers to understand DEF service requirements.
• Fleets exploring retread tires as a cost-savings measure.
• DOT and state regulatory changes, such as the BIT (biennial inspection of terminals) inspection in California.
• Implementation of cost-savings initiatives involving repair vendor selection and choosing different tire brands.
• Implementation of pre-trip inspection rigor to reduce future unscheduled maintenance issues.

Top 5 Maintenance Trends for Light-Duty Truck Fleets

The top five maintenance trends for fleets operating light-duty trucks are cited by
Frank Stracke, case manager, managed maintenance for Element:

• Constraints in new-model replacement tire availability.
• Diesel DEF issues and the need for ongoing driver education.
• Back-ordered parts that may be available only at dealers.
• Shortage of trained drivers that understand all the regulations and correct truck operation.
• Requests for non-standard OEM replacement tires due to geographic off-road terrain, which may create safety issues.

Editor's note: This article is part of a three-part package dealing with fleet maintenance costs in 2015. Read related articles covering oil service costs and tire costs.

Related: Fleet Maintenance and Repair Costs Decrease in CY-2015

 

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