A new report by Element Fleet Management has found that vehicle maintenance expenses increased by 3-5% in 2018.
Automtove-Fleet.com recently reported on an Element Fleet Management (EFM) study, which discovered that passenger vehicle maintenance expenses increased by 3-5% year-over-year in 2018 compared to 2017. The study analyzed the maintenance costs of cars, SUVs, crossovers, and minivans, and it found that this increase in cost is due primarily to an increase in labor rates, cost of parts, and fleet vehicle retention.
“The increase in maintenance spend was primarily related to higher labor and tire costs,” confirmed Mark Lange, CAFM, an analyst for Element Fleet Management.
One of the biggest reasons for a consistent increase in vehicular maintenance spend is a rise in labor costs. This rise can be partially attributed to an increase in technicians' salaries. As vehicle functionality and operation become more reliant on electronics and software, highly skilled technicians are in high demand. These technicians usually command a higher salary than traditional mechanics, which hikes up the overall labor cost. Furthermore, older technicians are retiring faster than younger technicians are entering the profession, so "the demand for these technicians exceeds the labor supply," reported Automotive-Fleet.com. These factors have led to a spike in technicians' salaries and to a rise in overall vehicular maintenance costs, including oil changes and tire changes.
Another reason for these higher maintenance costs is the increase in replacement parts. Automotive-Fleet.com reported that brake, caliper, and tire costs have all gone up in 2018. EFM's analysis found that tire spending per unit per month increased by 8% because of larger tire diameters, more expensive tires, and a higher cost associated with tire manufacturing.
Preventative maintenance costs are an additional factor contributing to the rise in maintenance costs. According to Automotive-Fleet.com, "changes in manufacturer requirements for oil specs are driving up the cost of preventive maintenance per unit per month." Thanks to manufacturers' recommendations for more costly and longer-lasting motor oils, the average cost per unit per month for preventative maintenance has increased by 9% from 2017 to 2018. This ongoing trend can be seen in the chart below.
A final factor that is affecting maintenance costs in 2018 was the extended length of time between vehicle replacements. “Fleet managers are extending vehicle replacements, which has driven up maintenance costs,” explained Lange. As fleets keep vehicles for longer periods of time, additional preventative and regular maintenance is required, leading to an increase in overall costs.
This rise in maintenance costs has been consistent since 2016, and EFM predicts these trends will continue into 2019 as well. As vehicles rely more on autonomous features, their cost of overall maintenance is predicted to decline, but the labor costs for technicians is expected to rise, which may continue to offset any reduction of maintenance costs in the near future. The expected rise in the cost of replacement parts, preventative maintenance, and fleet retention will also contribute to higher maintenance costs.
