NJ TRANSIT Leases 100 Vehicles, Slashes Maintenance Budget

Looking for a new, more efficient approach, NJ Transit has spent nearly 10 percent less to maintain a newer, non-revenue vehicle fleet in FY 2017– all by adding strategic leasing to its vehicle acquisition model

On average, a NJ TRANSIT light-duty truck remained in service for at least 11 years, accruing at least 120,000 miles, with many exceeding 150,000 miles. Often times, these trucks had to have rusty beds restored, and some had entire engines or transmissions replaced by onsite maintenance garages.

In 2014, the fleet reached a point with more than 100 vehicles – a tenth of its fleet – needing to be replaced, but the budget only allowed for 45 new vehicle purchases through its strict purchase-only model for acquisition.

Then came the change: In January 2015, NJ TRANSIT agency leased 101 vehicles to replace some of its oldest units still on the job.

The financial benefit became especially clear when comparing the maintenance costs of 2016 and 2017. In 2016, NJ TRANSIT spent approximately $5.85 million to maintain its fleet vehicles.

That amount dropped to $5.27 million just a year later – a savings of approximately $580,000 or 10 percent.

“Many of our trucks were showing their age. Several needed engine replacements as well as new transmissions and several body parts had rusted, resulting in maintenance expenses that escalated into a substantial deficit,” said NJ TRANSIT’s manager of support services and fleet administration, Jeff McNulla. . “Our newer leased vehicles are not only less expensive to maintain, they are more fuel efficient.”

Here’s where it gets even more interesting: NJ TRANSIT adopted a hybrid purchase/lease model which created the extra capital it needed to fund more vehicles in a single year, while also purchasing specialty vehicles that were crucial to the fleet.

With the savings the agency and its support partner, ARI uncovered, along with the influx of some additional federal funding, NJ Transit expects to replace another 259 vehicles, each with more than 100,000 miles, in the current fiscal year.

By taking a fresh look at how NJ TRANSIT replaced and resold its non-revenue producing fleet of vehicles, ARI helped the agency produce a significant savings to its bottom line, allowing it to be well on-track to update the fleet in its entirety.

Tags: fleet, Leasing, NJ Transit

Category: News