Replace or Repair: What To Look For When Evaluating Your Fleet Vehicles
Regular fleet vehicle evaluation can be a time-consuming but necessary process for all fleet managers. Because fleet managers are responsible for managing great numbers of vehicles at a time (sometimes from hundreds of miles away), it’s essential to gauge what kind of action will provide a safe and sustainable mode of transportation for all fleet drivers.
Often, this boils down to either repairing or replacing the specific fleet vehicles, both of which have very different considerations. So, what can help fleet managers to be able to make such decisions? Here are four things to consider when evaluating the lifespan and overall value of your fleet vehicles.
How Thorough Should Your Fleet Vehicle Maintenance Be?
The idea of fleet vehicle maintenance is relatively self-explanatory, as it describes the practice of keeping an organization’s vehicles in optimal driving condition. However, the process of doing so gets a bit more complicated when keeping track of the status of countless vehicles that can be operating at any given time.
At its core, this kind of maintenance calls for managers to plan for some combination of diagnostic work, repair scheduling, and real-time servicing to maintain reliable vehicles. Of course, it’s the role of the fleet vehicle manager to delegate or outsource necessary maintenance. Still, it is also at their discretion when deciding whether or not repairing a malfunctioning vehicle would be the most cost-effective option.
Why Are Regular Fleet Vehicle Evaluations Important?
Fleet managers are responsible for ensuring the safety and reliability of the company’s assets, which include both its drivers and vehicles. While it may be tempting to circumvent high repair costs by skipping regular fleet vehicle maintenance, it can make the given issue worse or even put the driver’s safety at risk. At the end of the day, routine evaluations and any subsequent maintenance are vital parts of the fleet manager’s job to keep all vehicles running correctly.
Additionally, the fleet manager is also expected to identify and minimize unnecessary spending, aiming to create more cost-efficient operations. For example, a fleet vehicle manager could schedule routine evaluations and have vehicles repaired as needed, but regular maintenance expenses can certainly add up over time. This is when it becomes crucial to determine a more cost-friendly solution for the company, including replacing the vehicle entirely.
It may be tempting to opt for a cost-effective, short-term solution initially, but sometimes investing in a brand new vehicle is the best way to circumvent rising maintenance costs. So how can fleet vehicle managers decide when the more economical route is the one to take? Below we’ll address four considerations that can help make the distinction between repairing or replacing a fleet vehicle when any issue arises.
Considerations to Make When Evaluating Your Vehicles
1. Fuel Costs
When it comes to large vehicle fleets, fuel and other routine expenses are a significant and frequent consideration. uel is the second-largest fleet-operating expense, eating up about 60% of the average company’s total fleet operating budget. Depending on the type of vehicle, newer, more fuel-efficient models may prove to be an appealing option to save money down the line.
However, investing in these vehicles may not prove to be the most cost-effective long-term, especially when multiplying investment costs across the entire organization. Fleet management solutions and custom engine calibrations are one alternative that can be used to significantly improve the fuel efficiency of vehicles and create much more manageable spending in this category.
2. Downtime Costs
While less efficient vehicles may require additional costs to keep operational, downtime experienced with non-functioning vehicles can often serve the harshest blows. Therefore, fleet vehicle managers need to consider downtime costs when weighing repair or replace options. These costs can include repairs, labor, and towing expenses, added fuel costs, and of course, lost revenue.
3. Driver Safety
Cutting costs wherever possible is just one of the many goals of a fleet vehicle manager, but driver safety should be of the utmost priority. In addition, regularly completing preventative maintenance ensures safety and reliability, which results in more minor, more frequent expenses over time. But when properly maintained, a fleet vehicle is less likely to experience detrimental issues that should warrant its replacement.
If driver safety is still in any way compromised for a repaired vehicle, it is recommended that it is replaced. To avoid the danger of a malfunctioning vehicle away from its place of origin, fleet vehicle managers should take the initiative to ensure safe transport for their drivers.
4. Total Cost of Ownership (TCO)
Fleet managers need to understand all costs associated with maintaining their vehicles long-term vs. investments necessary to upgrade their fleet adequately.
Simply put, a total cost of ownership (TCO) is the purchase price of a particular asset in addition to its costs of operation, granting a holistic view of the product’s value over time. As this concerns fleet vehicles, TCOs account for their purchase price, operating costs, and maintenance expenses. In the context of managing a large number of these vehicles, the total cost of buying, operating, and maintaining these assets may prove to be more costly than they are worth over time.
Of course, while new fleet vehicles might grant lower operating costs than an older one needing repairs, new replacement vehicles also require a significant upfront investment. Thus, the great balancing act that fleet vehicle managers must perform is finding the lowest total cost of ownership for each vehicle and the fleet as a whole. Whether repairs or a replacement offer it, the lowest total cost of ownership must be a significant consideration.
When considering either investing in repairs or a replacement, a fleet vehicle manager should consider a balance of both cost and safety for the organization. Following these four considerations will help to ensure reliable and efficient vehicles long-term and reduce unnecessary spending.