Automotive Fleet

NOV 2013

Magazine for the car and truck fleet and leasing industry

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PHOTO: ŠISTOCKPHOTO.COM/1001NIGHTS OPERATING COSTS One factor putting upward pressure on maintenance costs has been increased vehicle complexity. to increase market share. While still significantly more expensive than mineral oils, synthetic oil costs continue to decrease," said Piscopo. Tis phenomenon is also occurring in the truck feet market. "Higher use of semi-synthetic and full synthetic oils by the manufacturers has increased PM costs, leading some customers to stretch their LOF (lube, oil, and flter) intervals," said Crumlett of Emkay. Extended oil drain intervals are a major factor in decreasing motor oil expenses. "Oil has not been a focus of feet managers for several years. Tat changed in the past few years. First, some makes and models have recommended using only synthetic oil when doing preventive maintenance. While the synthetic oil is more expensive, extended service intervals have lessened the impact of this change," said Bauer of Wheels Inc. Others see the increased adoption of synthetic motor oils by OEMS as putting upward pressure on PM expenses. "With more manufacturers mandating the use of synthetic oils, we foresee oil change costs moving upward," said Mark Ackerman, manager of maintenance and repair management at LeasePlan USA. Although transaction prices increase with synthetic oils, the extended drain interval will result in an overall price decrease. "Te change to synthetic oils by many of the manufacturers has increased the average oil change transaction price. However, the frequency of a synthetic oil change is lower, so the total cost of oil changes for many feets was mitigated in 2013. ACKERMAN Some national account providers have reduced their oil change transaction price in 2013 and this had a noticeable impact on the price trend as well," said Blaine of Donlen. Forecast of Motor Oil Cost One unintended consequence of longer oil-drain intervals is the possibility of fewer vehicle inspections. "We believe the cost of oil-related services will continue to rise on a per-ticket basis. But, more OEMs will be pushing extended drain intervals, which will be implemented by more feets. An important byproduct of this trend is the added importance of detailed vehicle inspections, as vehicles are seen by shops at a lower frequency," said Piscopo of ARI. Tere seems to be consensus among observers that we will see increased use of synthetic oils in feet vehicles. "We expect to see higher percentages of synthetic oil usage and programs ofering complimentary preventive maintenance for the initial in-service years of the vehicle," said Fontana of Emkay. Bauer of Wheels Inc. made a similar observation. "It appears that there will be more vehicles requiring synthetic oil and more manufacturers ofering free preventive maintenance." Te migration to synthetic motor oils will cause transaction prices to increase. "Te continued switch to synthetic fuels will keep transaction prices higher, but we expect feets to be able to mitigate their total oil change spend due to the reduced frequency of oil changes. Over time, the cost of synthetic oil will continue to decline as the utilization increases," said Lodding of Donlen. AF NOVEMBER 2013 I AUTOMOTIVE FLEET 33

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