We couldn’t help notice in the latest VFACTS report from the FCAI, that SUVs were 52% of new cars sold so far in 2021. This shift away from passenger vehicles is changing the profile of fleet carparks and impacting the Whole of Life Cost calculations for Fleet Managers.
So what is the cost difference between a small hatchback and a medium SUV in 2021?
We’ve chosen to compare the popular Toyota Corolla Ascent Sport and the Toyota RAV4 GX. Both are good fleet cars and are popular novated lease options as well.
First, we visited the Toyota website to compared service costs. Under the Toyota advantage program the Corolla is $180 per service and the RAV4 is $215. During our three year lease the RAV4 would cost $105 more over three services. First points to the Corolla.
Tyres are the next consumable we looked at. Using the Bob Jane T-Marts website, we compared the tyre costs for both vehicles. Travelling 60,000 over three years will wear out a minimum of four tyres. It may be more with a pool car or one driven in metro areas with lots of stop/start short trips.
The Corolla tyres cost $145 each and the RAV4 $195. We selected Bridgestone for both vehicles because it’s the brand fitted at the factory and we have a ‘like for like’ tyre replacement policy with our fleet. The difference for four tyres is $200. Corolla wins again.
For the cost of fuel we looked at the published fuel consumption figures. The Corolla is 6L/100km and the RAV4 is 6.5L/100km. This seemed too similar considering the size difference. To check, we visited the Green Vehicle Guide website (which is looking tired in 2021). It provided the Combined and Urban fuel economy figures which matched the Toyota website. Then we realised both vehicle are running the two litre engine which explains the similar fuel consumption.
With similar fuel consumption figures, the total cost of fuel over 60,000 kilometres only varied by $252 when using $1.40 cpl as the pump price. Another tick for the Corolla which was in front by $557 after three legs in the running costs relay. The next event is depreciation, and the RAV4 should win this one considering the popularity of new SUVs.
But what’s a used fleet car worth in 2021? Approximately 35% more than in January 2020 according to Datium Insights who have tracked the used car market since the start of the COVID pandemic.
Forecasting used car values is the dark art of fleet management and requires mountains of data, years of experience, and a crystal ball. In the FAN office, we only have two of those three things. So we decided to visit the used car section on the Toyota website to get the market value of both cars at 36 months and 60,000. The prices were crazy!
Using our estimations, a three year old Corolla is selling at 83% of the new car price and a used RAV4 is 88% (these are retail prices through a Toyota dealership).
So we went back to the Datium Insights weekly market update for a sanity check. The good news for people with cars to sell is, the Toyota website was right. The wholesale resale price of a three year old Corolla on 7th June was 73.4% and the RAV4 was 75.7%.
The table below shows our simplified Whole of Life Calculations on the RAV4 and Corolla over 36/60. It shows the Corolla is cheaper for a fleet to operate by $2,259, or $62.74 per month. If your fleet has 100 vehicles, that’s a saving of $225k over three years.
So the switch to SUVs is costing companies more to run their fleets while generating more revenue for vehicles manufacturers, fuel companies and service providers (But employees are happier with SUVs in their driveways).
|Corolla Ascent Sport||RAV4 GX||Corolla
|Cost per Service||$180||$215||$540||$645||$105|
|Cost per Tyre||$145||$195||$580||$780||$200|
|Fuel Consumption||7.50 L/100KM||7.80 L/100KM||$6,300||$6,552||$252|
|% of New Car Price||83%||88%|
- Ownership period three years and 60,000 kilometres
- No finance costs included
- Annual registration cost not included
- The depreciation precentage is from the Datium Insights market report on 7th June 2021
- Fuel cost calculated using a pump price of $1.40 cpl
- Purchase price from the Toyota website for delivery in metropolitan Sydney
- Tyre costs from Bob Jane T-Marts website
- Service costs are from the Toyota Advantage program