Managing Costs to Find Hidden Savings – The NJTRANSIT Case Study

Simply put, it costs more to operate an old fleet. Maintenance costs increase, fuel economy decreases, and the resale values of these old and tired vehicles are next to nothing.

Instead of purchasing vehicles, running them into the ground and then trying to offload them, smart organizations are leveraging the power of leasing to free up capital, acquire more vehicles, and in turn decrease their total cost of ownership. This was the exact case for NJ TRANSIT, a transit agency that adopted a strategic acquisition model with ARI encompassing both leasing and purchasing vehicles.

Maintenance, fuel and remarketing easily become significant hidden cost drivers that impact fleet operations. Studies found when fleets don’t adhere to the recommended maintenance schedule, monthly costs can actually increase more than 47 percent. In addition, identifying the “sweet spot” when vehicles surpass their resale value can add additional revenue back into the fleet budget instead of declaring vehicles a total loss. NJ TRANSIT learned this firsthand when vehicle returns were double what the transit agency earned prior to establishing its partnership with ARI.

Once fleets get a handle on these hidden costs impacting fleet operations, the returns speak for themselves. NJ TRANSIT decreased maintenance expenses by at least $500,000, and earned over $200,000 in vehicle remarketing returns with ARI.

To learn how they did it, click here to read the full case study.