New data from Fleetcor-owned epyx points to an increase in the age of company vehicles.
Epyx, which provides service, maintenance and repair (SMR) through its 1Link network, says the average age of a gas-powered fleet car undergoing SMR has risen by more than a year since the start of the COVID pandemic in 2020. According to the company, the vehicle age is now 31 months, up from 18 months.
A similar age uplift has occurred in diesel vans, although less dramatically — rising from 31 months to 39 months, epyx says.
These figures may come as no surprise to fleet managers, a combination of out-of-use vehicles during the pandemic lockdown followed by an acute lack of vehicle availability post-pandemic, has necessitated contract extensions and extended lifecycles.
Tim Meadows, chief commercial officer at epyx, said:
“The reasons for the increase are well understood. Initially, some operators opted to hang onto vehicles for longer because they didn’t cover the expected mileage thanks to lockdowns, but more recently, very poor new car and van supply has been much more of an issue. This is a situation that is only improving relatively slowly, with a huge order backlog still in place.”
Another reason for extended lifecycles has been the increases in interest rates, which have impacted funding for new vehicles.
According to Stellantis chief affiliates officer, Philippe de Rovira, the company was seeing longer-term financing to offset raised rentals spiked by higher interest rates.
Speaking to Reuters, de Rovira said that longer-term financing and leasing deals were moving out to four years from three to keep the monthly rentals at a rate similar to what had gone before.
Whatever the reason, the implication is for increased focus on SMR spend. Meadows added that the jury remained out on whether the average age of vehicles would continue to increase, or more normal pre-pandemic lifecycles would return.
“The underlying question is whether fleets will choose to operate younger car and vans when supply makes that possible or whether they have learnt that they can economically and effectively operate older vehicles,” he said.
The epyx 1link Service Network SMR management platform is used by fleets with a throughput of more than 4 million vehicles.