Vehicle Replacement Survey points to mileage and age as major factors


Vehicle Replacement Survey points to mileage and age as major factors

Source: FleetAnswers One of the largest expenses fleets face is the expenses they have when replacing a vehicle. Utility fleets often face some of the highest, as their unique vehicles have a high replacement costs. Utilimarc recently surveyed a group of utility companies in the United States and Canada to determine what factors were considered in their replacement policies. Understanding the results of this survey will help fleets who are establishing their own replacement policies make the best decisions for their fleets.

Replacement Age Increases with Vehicle Size

One interesting finding in the survey was the correlation between vehicles size and average replacement age. Smaller vehicles, like light pickups and light vans, had an average replacement age of five to eight years. Larger vehicles, like medium to heavy buckets or digger derricks, had a replacement age between 10 and 12 years.

Interestingly, almost all vehicle categories on the survey had a higher average replacement age compared to the target replacement age. For instance, survey respondents indicated they had an average replacement age of 12 years on digger derricks, compared to a target replacement age of 11.69. Light vans had an average of eight years compared to a target of 6.93. Only medium and heavy buckets and light pickups had a shorter average replacement age compared to the target replacement age.

Factors Impacting Replacement Decision

Multiple factors impact a company's decision to replace a vehicle. Sometimes the decision comes down to the cost of repair compared to the cost of purchasing a new one. When a critical component goes out on a vehicle, the company must decide whether they will replace or repair it.

The key to a successful vehicle replacement policy is determining how long is too long to keep a vehicle. For utility fleets, the age of the vehicle may not be the best measurement. Some vehicles have lengthy drives on a regular basis, while others are only used occasionally. Mileage and engine life can both be used to help determine the appropriate vehicle replacement time.

In the survey, respondents indicated that their vehicle replacement policies often had mileage limits in place.  Light pickups and vans had the lowest average lifetime mileage, with 121,409 and 121,889 miles respectively. Heavy buckets and digger derricks had the highest average lifetime mileages, with 154,742 and 153,297 respectively. The most common response for every vehicle class surveyed was 150,000 miles.

Engine hours can be another effective way to measure the lifetime of a vehicle. However, the survey respondents indicated they did not sue lifetime engine hours for many of their vehicles. In fact, light service trucks, light buckets, medium buckets, heavy buckets and digger derricks were the only vehicles that were measured in this way when determining the ideal replacement time.

Establishing a Vehicle Replacement Policy

Not all of the survey respondents had a vehicle replacement policy. Of the 22 companies that responded, 81 percent indicated they had a formal replacement policy, while 19 percent indicated they did not.

The categories of age, lifetime mileage and lifetime engine hours can all be part of the modern fleet's overall vehicle replacement policy. With a replacement policy in place, today's fleets can maximize the use of their vehicles, while minimizing unnecessary or premature replacement costs. Establishing a formal vehicle replacement policy will help today's fleets save money.

Read the Company Replacement Policy Survey report