Have Fleet Extensions Changed Fleet Replacement Cycles for Good?

The combined effects of the pandemic and the delay in new vehicle replacement times may have completely changed the fleet replacement cycle as fleets weigh up the changes forced on them from external factors.

The traditional fleet cycle has centered around cars being changed every three to four years. Commercial vehicles are usually changed every four to five years. But with changes in working patterns to a more hybrid home/workplace routine (plus the lack of actual mileage during various pandemic-induced lockdowns) along with the shortage of replacement vehicles, these traditional fleet cycles are now being reevaluated.

According to fleet management provider FleetCheck, fleets have been adding at least a year to these replacement cycles while some have extended operational lifecycles further still.

Peter Golding, managing director at FleetCheck, said, “What has become clear over the last few months is that the fleets we work with do not view these extensions as a one-off. In the future, they plan to operate vehicles for longer on an ongoing basis.”

Extending operational periods introduces additional considerations for the fleet manager, however, centering around maintenance and HR (human resources).

“The maintenance aspect applies to any replacement cycle,” said Golding. “The longer you operate a vehicle, the more potential there is for things to go wrong. This means that your service and maintenance policies need to be watertight.

“For a start, moving beyond three years takes most cars and vans beyond the manufacturer warranty as well as moving you into the first MOT. This creates a number of potential cost and safety points that will need to be carefully managed. Also, there is certainly a tendency for the cost of keeping a car or van on the road to escalate as it enters year four. There needs to be consideration given to the impact on not just whole life costs for owned vehicles but monthly rates for leased ones.”

Golding believes that to ensure effective fleet management, fleets will require realtime data insights while also constantly ensuring vehicle roadworthiness to make extended lifecycles fully risk-managed.

“Additionally, the HR angle is very particular to each employer but, in some industries and some job roles, it is very much expected that a new car will be provided every three years,” added Golding. “At a time when recruitment and retention is markedly difficult, this is a genuine issue.”

It will certainly require that the fleet manager engages all stakeholders to ensure buy-in to these new vehicle running periods, and should they be implemented, to ensure there is no adverse employee retention kickback.

Golding also added that the arrival of electric vehicles (EVs) had also impacted reconsideration of lifecycle management. He concluded:

“There is a general perception, which appears to be correct based on our experiences to date, that EVs undergo less wear and tear than their petrol and diesel counterparts, and are likely to remain in a better mechanical condition for longer.”