Fleet costs have been steadily increasing over the past few years according to Element Fleet Management's Annual TOC release.
“Maintenance costs are steadily trending upward as a result of advanced vehicle technology, skilled labor shortages, increased tire prices, and widespread use of engines that require high-capacity and synthetic oils. Increasing shop overhead costs are also adding to maintenance costs as a greater number of sophisticated tools and software are needed to service advanced vehicle systems. The rising cost of shop overhead is ultimately passed along to the shop customers,” according to Mike Emmons, National Service Department Manager for Enterprise Fleet Management.
The also report found that fleets both large and small were waiting longer in between oil changes - partially due to the use of higher quality synthetic oils - causing an the unwanted effect of leaving potential problems unchecked for longer periods of time.
Higher Labour Costs and Skilled Mechanic Shortage
Another reason regular fleet maintenance costs are rising is the cost of labour for both trades people and unskilled labourers. With baby boomers retiring and younger workers being drawn to more high tech blue collar jobs, Canada is experiencing a labour shortage unlike those they've seen before. The result is that garages and other organizations are needing to increase the hourly pay rate to attract qualified candidates. This coupled with last year's sharp increase in the minimum wage for unskilled labourers has caused many shops to pass those increases onto the consumer.
This chart demonstrates the sharp increase in the minimum wage in 2017.
Upward Trend to Continue in 2019
A week in, and the experts have already been forecasting that this upward trend of fleet maintenance costs will continue into the new year.
“We are expecting increases for maintenance/repair costs slightly more than inflationary costs especially in the lower-skilled services such as oil change, tire rotations and other preventive maintenance services. The push to increase wages for low-skilled positions will impact labor cost associated with these types of services,” said Chad Christensen, senior strategic consultant for Element Fleet Management.
So how can I save on fleet maintenance costs?
Any business owner or manager must always keep their eye on the bottom line. So is the rising cost of fleet management something that you should just accept? Of course not.
One way to save is to invest in hybrid or fully electric vehicles (EVs). “Maintenance costs on EVs are roughly 30% less based on industry data. Full electric vehicles have neither emissions nor exhaust systems requiring repairs. The lack of a gasoline or diesel-powered engine means oil changes are a thing of the past. In addition, because most EVs have what’s called regenerative braking (using the electric motor instead of the friction brakes to slow the vehicle under certain circumstances), brake life has the potential to be longer on EV vehicles,” said Chris Bellios, maintenance supervisor for Wheels Inc. While hybrid vehicles still have fuel systems that would require repairs, the intervals for many maintenance systems would be much longer.
Can't afford to buy all new vehicles? Not many companies can! Consider saving money in other ways such as having a mobile mechanic come preform the maintenance and repair services on-site. "Mobile mechanic services such as GoWrench don't have the same overhead costs as a brick and mortor shop or dealership - and we are able to pass some of those savings to the customer" says Joshua Lombardo-Bottema, CEO and Founder of GoWrench Auto Inc.
A mobile mechanic also protects your bottom line in other ways - you would no longer need to pay someone to drive the vehicle to the shop and wait for the repair to be completed and you can schedule bulk maintenance services to get your vehicles back on the road faster. "Having a mobile mechanic come to your lot and preform maintenance and repair services on numerous vehicles within the same visit translates easily into more time those vehicles can be spent on the road earning money for your organization" notes Lombardo-Bottema.
Interested in finding out more about how GoWrench's Top-Rated Mobile Mechanics can help you? Click here.