Have extensions changed company car and van replacement cycles forever?

EXTENSIONS forced on fleets by both the pandemic and much delayed order times for new vehicles have probably changed company car and van replacement cycles forever., reports FleetCheck.

FleetCheck Managing Director Peter Golding, said that fleets had realised that vehicles had the potential to be operated for markedly longer than had occurred in the past and had learnt a new skillset to enable this to be done economically and efficiently.

He said: “Fleets have been hanging onto vehicles for longer either because they didn’t cover many miles during the pandemic or they have simply been unable to source replacements. We’ve gone from a situation where generally cars were operated for replacement cycles of 3-4 years and vans from 4-5 to one where around a year has been added on average across the board.

“However, there are also some outliers who have taken more dramatic steps. We have one client who has extended their policy for cars from three to five years in a single move.

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

Golding said that there had been two key areas for businesses to consider when looking at the potential for permanent extensions – maintenance and human resources (HR).

“The maintenance aspect applies to any replacement cycle. 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.

“Keeping on top of these points in terms of controlling costs and ensuring roadworthiness means you need to have data to hand in a format that allows you to understand your situation at any given point in time and to adopt the right policies. This is an area where we have been working closely with clients in terms of utilising our software effectively.

“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. At a time when recruitment and retention is markedly difficult, this is genuine issue.”

Peter added that the arrival of electric vehicles (EVs) on fleets was also playing a role in the process of extending cycles.

“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.”

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