Truck Fleet Cost of Ownership - Corporate Fleet Vehicle | Auto Fleet Management and Leasing Services in US
A vehicle’s TCO is impacted by four lifecycle categories no matter what type of truck is under consideration.
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Truck Fleet Cost of Ownership

Truck Fleet Cost of Ownership

28 Sep Truck Fleet Cost of Ownership

Owners of truck fleets are constantly challenged to reduce their total cost of ownership (TCO). A vehicle’s TCO is impacted by four lifecycle categories no matter what type of truck is under consideration. These are fixed costs, operating expenses, incidental costs, and depreciation or resale value. The length of time a vehicle is kept in service has a bearing on all of these factors.

One strategy that a fleet owner may consider in their attempt to lower the overall TCO is to extend the service lives of their vehicles. At first glance, this would seem to be a no-brainer, as delaying the capital costs of replacement vehicles sounds like a good way to save money. However, this is not always the case, and in many instances, the extended cycling of your vehicles can have a detrimental impact on your total cost of ownership.

Let’s take a look at how extending the lifecycle of your vehicles can actually cost you more in the long run than engaging in a regular and consistent policy of vehicle replacement.

More Expensive Operating Costs

As your fleet ages, the operating costs associated with keeping your vehicles on the road increases. Fuel economy traditionally suffers as a truck ages. In addition to increased fuel costs that your older trucks will incur, by keeping them in service you are not taking advantage of newer and more fuel-efficient models. This can lead to substantially higher fuel bills which add to your TCO.

Maintenance costs are also likely to rise with an aging fleet. Your trucks are the lifeblood of your company and you need to keep them operating in order to service your customers. Older trucks will often lead to more downtime for repairs, minimizing the potential of your fleet to adequately perform its duties.

Impact on Resale Value

The longer you hold on to your trucks, the less value they will have when you attempt to sell them. If you hold on to them for too long, you will only get a small fraction of your purchase price which will not go far when purchasing new vehicles. Replacing your trucks while they still have a high resale value keeps your fleet looking sharp and will save you money in the long run.

Unexpected Incidental Costs

When older vehicles need repairs and are out of service for a time there are costs beyond those of the repairs that need to be considered. You may have to pay drivers to simply sit around and wait. There is also the potential for customer loss if you cannot fulfill delivery or service expectations.

Diminished Company Image

Deploying an aging fleet of trucks can have a detrimental effect on your company’s image. First impressions are important, and showing up for a job in a vehicle that is on its last legs is not a good way to generate confidence in prospective customers. Money spent on keeping your fleet modernized can have a ripple effect on your business and in your drivers’ morale.

These are some of the reasons that you need to reconsider longer cycling times for your fleet vehicles. Though your initial thought may be that extending the life of your current fleet will save you money, you may well find that the opposite is true. A more modern fleet can benefit your company in a number of ways.