Is a Vehicle’s Life Cycle Reliant on Age Alone?
More often than not, fleet managers write their vehicle lifecycle policy in terms of a vehicle’s age and the number of miles it has driven. In such a policy, a light-duty truck – like a Ford F-150 – might have a life cycle of 10 years or 150,000 miles driven.
This raises the question: Do key factors, like age and miles driven, that aid in determining vehicle life cycle, actually help you determine how expensive a vehicle may be to operate as it ages?
Can Age or Life to Date Mileage Determine Operating Costs?
Both age and mileage driven in the vehicle’s lifetime determine the expense needed to operate a vehicle. These two variables can give insight into maintenance costs associated with the vehicle as well.
The table shown below displays the maintenance cost of an F-150 equivalent truck broken out by age and life to date (LTD) mileage.
In this table, each cell shows the average maintenance cost (consisting of parts and labor) per mile for a vehicle of the specified age and LTD mileage.
For example, a four year-old pickup truck with 50,000 LTD miles can be expected to cost you an average of $0.14 per mile in parts and labor to stay on the road every time you drive.
In this table, the green cells reflect the cost of less expensive vehicles, whereas the red cells represent more expensive options.
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Recognizing Patterns Within Our Data
As we look at the table, the colors illustrate an unexpected pattern. Moving across the row horizontally (representing LTD miles), you’ll notice slight changes in color, rather than a dramatic shift.
For example, a six year old pickup reported that whether it has 40,000 or 100,000 LTD miles, it still costs $0.17 per mile.
This signifies that LTD mileage seems to have less impact on calculating the anticipated maintenance cost per mile than age may have.
If you move down each column, conversely you’ll almost always notice a dramatic shift in color from green to red.
This is due to older vehicles, on average, being significantly more expensive to operate – even with a constant rate of LTD mileage.
As Utilimarc analyzed the data, we asked: Why would a pattern such as this occur? Perhaps it’s because problem units are either sold or scrapped before making it to high lifetime mileage, or it could potentially be due to other factors affecting the cost per mile as well.
Should it Stay or Should it Go?
Do we keep older vehicles with a lower LTD mileage count?
This is a decision that many (if not all) fleet managers have to face at some point. It may seem like a good option, given the low mileage, but holding on to a vehicle with low LTD miles may end up being more expensive than initially expected.
In view of this, fleet managers need to be careful about how they structure their vehicle lifecycle policies, taking into account many variables – regardless of patterns and data – and should always be cautious when considering vehicles for replacement.
A friendly reminder: just because it’s a low milage unit doesn’t necessarily make it worth hanging on to for the long-run.