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2/18/2013 8:00:00 AM Write a Letter to the Editor Write a letter to the Editor

Opinion: Always Track Fleet Maintenance Costs

This Opinion piece appears in the Feb. 18 print edition of Transport Topics. Click here to subscribe today.

By Jack Boetefuer

CEO, Arsenault Associates

There’s no real mystery as to why otherwise intelligent fleet operators so often negotiate full-service leases using only big, round numbers. Reason No. 1 is that they simply don’t know their actual, detailed maintenance costs. That’s a pity because in that situation, the fleet operator’s lack of knowledge virtually hands the negotiating advantage to the leasing company.

I recall a fleet-maintenance panel discussion when one question after another from the floor dealt with costs. Leasing representatives on the panel were peppered with questions like, “How far will a clutch go?” and “How much can we get out of a transmission?”

The leasing panelists said the answers depended on the drivers and other operating circumstances. Those responses were true enough, yet unsatisfying.

If a fleet operator was tracking his costs, he already would have the answers — and those answers would be specific, revealing and often intelligent indicators of actions that should be taken. And they would certainly enable him to negotiate a lease from a much stronger position.

“Fleet owners say, ‘Here are my costs’; fleet lessors say, ‘Here is my rate.’ ” That’s an old cliché in the leasing business, and leasing professionals know exactly what this insider observation means: Costs and rates are two very different things. If you don’t know the first, you’ll probably pay too much for the second.

That’s valid whether you’re negotiating your first lease contract, renegotiating an existing contract or seeking bids from other leasing companies. Even though the lessor does the maintenance, you’re still paying the bill. You should know exactly what you’re paying for.

That’s why smart lessees track vehicle costs closely even when the lease is full-service and covers maintenance. By using maintenance software, you can see fleet trends, costs and areas of exposure. You know which vehicles and components perform better than others. You can spot problem drivers who abuse equipment and drive up costs.

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