Evolving Purchasing Habits May Impact TCO for Fleet Operators

The demand for compact SUVs and crossovers continues to grow as improved fuel efficiency and added versatility make these models a more attractive option for many drivers. As buying habits shift, an increasing number of OEMs are announcing plans to retire sedans from their lineup in favor of more desirable SUVs and crossovers. And this trend is beginning to proliferate the fleet industry as well.

ARI’s Matt Costolo, assistant manager, business intelligence & analytics, recently spoke with Fleet Financials to analyze how this shift towards SUVs/crossovers may impact the total cost of ownership (TCO) for fleet operators. In the article, Matt notes that while OEMs are likely to introduce new crossover/SUV models as they phase-out sedans, TCO is still poised to increase slightly for those fleets that opt for SUVs and crossovers rather than sedans.

“On average, TCO for crossovers and SUVs is about 10-12% higher than comparable sedans, often driven by upfront acquisition costs. Fuel economy and maintenance expenses also impact TCO but to a much lesser extent. A projected increase to resale value will help to offset this slightly,” said Costolo. “Sustained demand for crossovers and SUVs is increasing projected resale value by as much as 50% as compared to similar sedans, helping to offset some of the initial invoice increases. This is a reflection of the used-vehicle market as a whole as consumers continue to opt for small SUVs rather than mid-size sedans.”

Visit Fleet Financials to read the entire article and be sure to read more about how ARI is helping fleets take control over six critical areas that have the highest impact on total cost of ownership.