August 2008, Automotive Fleet - Feature
Pros & Cons of Extending Replacement Policy
By Staff
The Downside: Overall Vehicle Condition Deterioration
What, then, is the downside of extending vehicle service life? It is difficult to spell out on paper, but as vehicles remain in service, overall condition begins to deteriorate:
- Internal seat, carpeting, and roof liner wear and tear.
- More and more nicks, dings, dents, scrapes, and other minor damage not cost-efficient to repair.
Even when properly maintained via a vigorously enforced preventive maintenance schedule, the engine and other drivetrain components continue to operate and fuel efficiency can sometimes decline.
Driver morale will inevitably take a hit, as drivers are told to keep vehicles in service for many months, if not years, beyond the expected period.
In addition, drivers are less likely to agree to purchase out-of-service vehicles when mileage is much higher and interior and exterior conditions are deteriorated.
Finally, while vehicles are built significantly better today than 30 years ago when the current 36-month/65,000-75,000-mile policy became a widespread practice, the risk of major component failure increases, and fleet managers aren’t in the business to play with such risks.
Vehicle Life Extended with Manageable Risk
Clearly, there are some very good reasons to extend fleet service life (and replacement policy) beyond existing levels to four or even five years and up to 90,000-95,000 miles, with acceptable risk and without an increase in cost. (Indeed, with a reasonable expectation lifecycle costs will actually decline.) Keep in mind:
- Vehicles must be carefully and regularly maintained.
- A regular schedule of condition reports with supervisor sign-off and consistent follow-up is required.
- Going up to and beyond 100,000 miles may be acceptable; however, driver morale, as well as resale value, inevitably suffer.
Vehicles, both autos and light trucks, are built far better today than in the days when keeping them in service beyond 75,000 miles was taboo. Bumper-to-bumper warranties cover to 50,000 miles and beyond, and powertrain warranties extend to 100,000 miles, eliminating that major mechanical failure risk.
By managing that risk with preventive maintenance and repairing body damage quickly, fleet managers can extend service life on some vehicles to four or five years to save hundreds of thousands of dollars.