Show me some studies about TCO and vehicle maintenance.
October 16, 2018 4:19 PM   Subscribe

I have a disagreement with my fleet manager about vehicle maintenance. I say that the path to lowest TCO is to faithfully maintain one's vehicle according to the manufacturer's recommended schedule. He says that it's to do nothing but oil changes and then repair what breaks. I have an opportunity to take my case to a higher level. Can you arm me with evidence?

For the purposes of this question, I'm setting aside things like safety, lost productivity due to unscheduled downtime, and professional pride. Assume that I've made those arguments and am pursuing those avenues as appropriate. This is specifically and narrowly about vehicle TCO (total cost of ownership). Also, we're starting from brand new vehicles here; my branch's fleet are mostly 2017/2018 models. They get a lot of miles though—I drive a 2017 work van with 42,430 miles on it.

My position is as above: the lowest total cost, taking into account all maintenance and repairs as well as vehicle replacement rates (i.e. longevity, or how often one needs to buy new vehicles to replace ones that are worn out) is to faithfully follow the maintenance schedule in the owner's manual, as closely as the demands of one's job allow. "An ounce of prevention is worth a pound of cure," is my motto.

My fleet manager's motto is, "If it ain't broke, don't fix it." He has told me that scheduled maintenance is just a way that vehicle manufacturers try to milk their customers for more money. Other than oil changes, he doesn't want me to have any work done on my vehicle unless something isn't functioning properly. For instance, he doesn't want me to have the brake fluid flushed unless the brakes are squishy. (Please ignore the safety issue implied by that policy; I may pursue that angle, but it's outside the scope of this question.)

I have an opportunity tomorrow to engage some higher-ups and ask them to back me in getting this policy changed. I'd like to see it changed for safety reasons, operational reasons, and reasons of professional pride, but what I would like to back those arguments up with is hard evidence that my way is the right way within the narrow scope of vehicle TCO. Can you provide me that evidence?

What I'm looking for are studies, trade publications, financial journalism articles, etc. that show what it means for vehicle TCO when you either maintain a vehicle diligently or do the bare minimum and then fix things as they break. My context is commercial fleets so ideally these resources would relate to that directly, but it doesn't have to be that tightly constrained. Basically I want to show up tomorrow with a half-dozen different sources to cite which back up my position that doing scheduled maintenance will save the company money directly in terms of overall fleet costs.

Now, if I'm wrong and the evidence points the other way then that's fine. I'm open to being wrong, and I'd appreciate knowing that if so. I'm open to the idea that there might be an evidence-based middle ground as well, and I'd like to see that evidence too if that's what the facts are. But if I'm right—and I think I am—then it would really be helpful to have some backup in the form of hard financial evidence. I'd really appreciate your help.
posted by Anticipation Of A New Lover's Arrival, The to Work & Money (13 answers total) 4 users marked this as a favorite
I suspect that much of the existing data will be highly manufacturer- and usage-dependent. Further, an experiment to see which of the two maintenance regimes truly minimize TCO would be subject to high variability: sometimes you get lucky with a car, and sometimes you buy a new engine.

One important data point: what maintenance is required to maintain your vehicle warranty? Surely you should at least be doing that.
posted by Huffy Puffy at 4:42 PM on October 16, 2018 [2 favorites]

There are so many factors here that you're going to have to find a study that incorporates things like:
* Cost of adhering to manufacturer's maintenance schedule vs. 'fixing what's broken'
* Point at which older vehicles are sold on vs. kept in service
* Manufacturer servicing vs. third party servicing/parts
* Knock-on costs from defects going unfixed, and leading to more expensive repairs
* Cost of efficiency losses due to breakdowns
* Costs due to sub-optimum maintenance (efficiency)
* Costs relating to driver safety and comfort
* Costs relating to type of oil used (usually synthetic oils more than pay for themselves)

Some of those may be things you want to exclude, but I think it's dangerous to assume that those things are irrelevant in terms of CTO.

Mathematically, it's a problem with a huge number of variables. But my hunch is that the optimal solution will lie somewhere between your two opposing strategies. It usually does.

If it were me, I would propose (assuming there are many vehicles) doing your own trial, which will automatically make the data relevant to your specific usage scenario. So take 2, or 5 vehicles and maintain those to the recommended schedule. Use good oil and good tyres, or whatever 'good maintenance' means to you. And track every penny spent on those vehicles vs. a similar sample of 'run until they break' vehicles. The cost to the business shouldn't be too prohibitive, and you'll need to carefully track the year-on-year cost of each strategy as the vehicles age. The best part is you get data that's specifically relevant to your business. And at the end of the process, you'll have your answer. Maybe you could argue that until you test this, you won't know for sure, and may be missing an opportunity.
posted by pipeski at 5:01 PM on October 16, 2018 [4 favorites]

Response by poster: There are so many factors here that you're going to have to find a study that incorporates things like: …

Yes, I know. I'm assuming that these studies have been done, given the billions of dollars at stake globally and the amount of data-tracking that even small companies do on their fleets. I just don't know where to find them and Google isn't helping me, hence the Ask.

I'm quite sure that my fleet manager isn't interested in running a multi-year study on our own fleet, nor do we have the operational bandwidth to do one, nor would we be able to get a meaningful sample size, and anyway I'm hoping to be able to make a change sometime this decade.

I'm trying to find what evidence (or even evidence-ish-publications like articles in trade magazines) is already out there. It's OK if it doesn't perfectly match my company's specific situation, I'm just looking for general, top-line results that support (or refute, if that's the way the evidence points) my position. We don't need to reinvent the wheel here, people must have already done this work.
posted by Anticipation Of A New Lover's Arrival, The at 5:15 PM on October 16, 2018 [1 favorite]

Your fleet manager is only sort of right. For the most part, manufacturers’ maintenance schedules involve a lot of non-critical stuff, including filter and oil changes (which absolutely should be done regularly) They usually include tire rotation, which should be done semi-regularly as well. They inspect the brake pads, too.

All that said, there is one critical piece that absolutely should be inspected and replaced well before it breaks...the timing belt. If the timing belt breaks, your fleet manager could well be looking at some mighty expensive engine repair or replacement.
posted by Thorzdad at 5:16 PM on October 16, 2018

Response by poster: I have already pointed out the timing belt issue, yes. I have pointed out lots of issues. What I'm looking for are third-party sources that support (or refute) my desired policy.
posted by Anticipation Of A New Lover's Arrival, The at 5:21 PM on October 16, 2018 [1 favorite]

The problem is that the financial benefits (or lack thereof) entirely depend on how your company acquires the vehicles, how long they keep them, how they are accounted for, how the vehicle budget is allocated, the company's tax situation, and many other variables.

Minimal cost maintenance that has solid evidence behind it avoiding future repairs, like oil and filter changes being done fairly shortly after purchase and at least every 7,500-10,000 miles afterward and tire rotation frequent enough to prevent premature wear when tires aren't dirt cheap can probably be justified if they're being kept in service to more than 40-50 thousand miles.

If the company is dumping them before 60k or so and owns them outright, I suspect you'll find that it's actually cheaper not to do preventative maintenance except maybe for oil changes. If 45,000 is near the end of the typical service life you can get away with basically zero maintenance beyond 2-3 oil changes without risking catastrophic failure before disposal.

The issue is that your company couldn't care less if the lack of maintenance means the car will have a catastrophic failure unless that failure is likely to occur while they still own it. All the data in the world showing that regular preventative maintenance doubles the service life of the vehicle from 75,000 miles to 150,000 miles won't be persuasive since it simply isn't their problem by then and it makes zero difference to the price they'll get at auction upon disposal.
posted by wierdo at 7:04 PM on October 16, 2018 [1 favorite]

Here’s some relevant scholarly work I found, not sure if it will help but at least it’s a foot in the door of the current literature, a short read and freely accessible. The paper:

... lists and describes the major problems resulting from the maintenance of vehicles, such as cost of fuel and insurance, expenses related to servicing of vehicles, conducting their periodic inspections and repairs, etc. It also considers the options to acquire savings that can be used for investments that could contribute to the development of the company.
posted by SaltySalticid at 7:27 PM on October 16, 2018

Best answer: I think that you are looking for Reliability Centered Maintenance vs. Reactive Maintenance

A list of RCM studies may be found HERE

In general, the downside of Reactive Maintenance is that it tends to be really expensive in terms of safety and schedule when things break. I couldn't find a scholarly asset, but HERE
posted by pdoege at 7:59 PM on October 16, 2018 [4 favorites]

Here is a scholarly paper that shows an increase in chance of failure as time and distance on parts increase. Using some of the terms that they use in searches would probably help turn up some others (like this).

From a glance, it does seem like the data supports some of his position - many of the parts can go quite a distance before failure. Automakers do overstate the need to do certain tasks (many recommended oil changes are very early), though some of those recommendations may be more about trying to avoid liability problems than pure profit.
posted by Candleman at 2:26 AM on October 17, 2018

Response by poster: pdoege's answer gave me the keywords I needed to search productively on this topic. Turns out that maintenance is a complex, data-driven rabbit hole (no surprise there) and that there are cases where reactive maintenance or run-to-failure maintenance makes sense, but they come with caveats that I think clearly make those strategies a poor fit for vehicle fleets. The state of the discussion in the industry seems to be centered around scheduled maintenance (the old-school best practice) vs. predictive maintenance (the newfangled, data-driven approach that is probably beyond the reach of my company).

Anyway, long story short I now have a bunch of articles backing up my position. It's not as black-and-white as I presented here, but what is? And I think I now have enough knowledge to navigate the gray area within the limited context that I'll need to handle. So, thanks very much!
posted by Anticipation Of A New Lover's Arrival, The at 3:16 AM on October 17, 2018 [1 favorite]

I'm not sure professionally (the company I work for has fleets of vehicles, service bays, and mechanics) but if you read the service manual for your average consumer car the maintenance schedule is straight up ridiculous and unnecessary.

That's actually how all those questionable oil change places make money- they pop in your make into their computer and then say you need a brake flush/transmission flush, etc to comply with your vehicle's maintenance schedule. They aren't actually lying to you (usually).

So the question becomes do you you personally follow that schedule and do all that maintenance?
posted by The_Vegetables at 8:11 AM on October 17, 2018 [1 favorite]

Response by poster: In the end we just agreed that I'll take it to the mechanic for oil changes, ask the mechanic to let me know if it looks like it needs anything, and if it does we can take care of it then. Sooooo anticlimactic.
posted by Anticipation Of A New Lover's Arrival, The at 3:28 PM on October 17, 2018 [1 favorite]

Response by poster: Oh and for what it's worth I do stick pretty close to the recommended schedule on my personal car, yes. I drive a 2003 Outback. It runs like a top.
posted by Anticipation Of A New Lover's Arrival, The at 3:32 PM on October 17, 2018

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