Fleet management trends: Q2 2025 report
June 26, 2025
From rising vehicle prices and maintenance costs to remarketing values, tariffs continue to loom over nearly every aspect of fleet management as Q2 draws to a close.
Tariffs aren’t the only challenge out there currently. Delivery delays, cost uncertainty, and shifting OEM incentives are all converging to make vehicle acquisitions more complicated this quarter. Meanwhile, fleet leaders are balancing immediate needs against long-term replacement strategies, all with an eye on maximizing value where they can.
In this Fleet Management Market Trends Report, we’re exploring the latest developments in three key areas:
- Acquisitions: Rising costs, tighter incentives, and long wait times.
- Maintenance: Delayed replacements are driving up costs and repair needs.
- Remarketing: Used vehicle demand is heating up, but supply constraints remain.
Let’s take a closer look at what this means for fleet and business leaders.
Fleet vehicle acquisition
OEM incentives are shrinking
As the impact of the new Canada/U.S. tariffs begins to unfold, Q2 is already revealing early signs of what’s to come. Early feedback from Element clients points to a few clear trends: OEMs are dialing back price incentives, vehicle costs are climbing, and there’s a growing sense of uncertainty about what the future holds.
Several clients have shared that they’ve received updated price lists from multiple OEMs, and they reflect a reduction in price incentives. This aligns with a recent J.D. Power–GlobalData report, which shows that manufacturer incentive spending per vehicle has dropped to $2,808, down 5.6% from March.
Even so, most clients haven’t made any big changes to their acquisition strategies just yet. For now, it’s a cautious “wait and see” approach as they monitor how pricing evolves. But with incentives shrinking and costs rising, it might not be long before an alternative strategy is in order.
Delays are the new normal
Vehicle delivery delays are still throwing a wrench into fleet planning. The days of quick 8–12 week turnarounds are a thing of the past. Now, clients are facing lead times of 16 to 24 weeks, and for some models, it’s even longer.
Because of these delays, more clients are leaning on rentals to fill the gap. In some cases, they’re turning to stock orders instead of waiting for factory builds, just to keep things moving.
This is similar to the disruption we saw during the height of COVID. And it’s not just the impact of tariffs. Ongoing supply chain issues, slower OEM production, and labor shortages are all slowing down the system.
Even popular models aren’t immune. As Reuters recently pointed out, high-demand vehicles like the Toyota RAV4 hybrid are seeing wait times stretch from two to five months in certain markets.
Recommendations for a proactive acquisition strategy
While many of these challenges are beyond a fleet manager’s control, there are still proactive steps leaders can take.
- Put your orders in early
Early ordering is the most reliable hedge against both cost increases and delivery uncertainty. By locking in vehicles sooner, fleets can reduce exposure to changing tariffs, limited OEM inventory, and rising incentive volatility.
- Prioritize long-term planning
Now is a good time to revisit replacement timing, budget forecasts, and internal expectations to build more resilient planning cycles. Element's Strategic Advisory Services can support clients in the planning process by exploring alternate vehicles/OEMs and diving into the financial impacts of different replacement cycles.
Fleet maintenance
Fleet maintenance remains a key focus this quarter as inflation, tariffs, and operational complexities heighten the challenges for fleet managers. Staying ahead of these challenges requires proactive and data-driven actions to ensure operational efficiency and financial stability.
Inflation and tariffs are driving up repair costs
The effects of tariffs, combined with inflation, are exerting significant pressure on repair costs. The Federal Reserve’s Beige Book emphasizes that businesses are warning customers about impending price hikes caused by tariffs, underscoring the economic instability. According to FleetOwner, FTR Transportation Intelligence projects tariff rates will increase to around 21% in 2025, amplifying costs for manufacturers and fleets alike.
Aging vehicles are increasing repair frequency
Due to persistent delays in vehicle deliveries, fleets are holding onto older vehicles longer than planned. These aging assets need more frequent and costly repairs, from brake replacements to engine overhauls. According to CCC Intelligent Solutions' Crash Course report the share of repairable vehicles aged 7 years or older has increased by 9 percentage points since 2019, contributing to rising repair needs and costs. Average vehicle ages have reached 12.7 years, reflecting the aging U.S. fleet. This shift in fleet vehicle lifecycles increases downtime and operational costs, demanding advanced maintenance strategies.
Technician shortages are extending downtime
A shortage of skilled technicians, particularly for electric vehicles (EVs), is further compounding maintenance delays. For both EVs and internal combustion engine (ICE) vehicles, labor gaps are stretching repair timelines, increasing fleet downtime, and driving up overall fleet expenditures. According to the U.S. Bureau of Labor Statistics, the demand for skilled automotive technicians is projected to grow steadily, with retiring professionals outpacing new entrants. Also, Legacy EV highlights that approximately 90,240 technicians will need to be proficient in EV technology by 2035 to meet the growing demand. These shortages, combined with the complexity of modern vehicle systems, underscore the urgent need for targeted training and workforce development initiatives.
Recommendations to reduce maintenance pressures
Fleet leaders can implement several strategies to control costs and maintain reliability:
- Adopt preventative maintenance
Proactively schedule regular oil changes, brake inspections, and diagnostics to reduce the likelihood of unexpected breakdowns and extend vehicle lifecycles.
- Strengthen relationships within networks
Work with preferred vendors to explore the possibility of discounted rates and reliable parts supply, improving cost control during high-demand periods.
- Plan for lifecycle costs
Incorporate projected inflation, tariffs, and extended repair needs to accurately budget for aging fleets. This ensures that increased repair costs and tariff impacts are accounted for in financial planning. Also, consider prioritizing the replacement of older, high-mileage vehicles, as these tend to incur higher maintenance expenses and operational downtime
These measures empower fleet leaders to manage costs strategically and maintain operational reliability, even within a challenging economic landscape.
Fleet remarketing
Remarketing offers a strategic opportunity for fleets as rising vehicle costs increase used vehicle demand. By capitalizing on pricing trends and optimizing asset timing, fleet managers can unlock significant financial advantages.
Heated demand for used vehicles
The market for used vehicles has heated up, driven by ongoing new-vehicle shortages linked to tariffs. Used-vehicle prices rose by 4.3% year-over-year in April, on a mix-, mileage-, and seasonally adjusted basis, according to the Manheim Used Vehicle Value Index. Notably, SUVs and luxury vehicles outperformed the overall market, with increases of 5.1% and 4.7% respectively. Similarly, Canadian averages climbed to CA $37,900 in April, a 9% monthly jump. This demand spike is expected to sustain upward pricing momentum throughout 2025 as dealers deplete inventories, and more buyers enter the market.
Rising resale values can offset fleet costs
Tariff impacts, alongside constrained supply, are driving resale premiums on used fleet vehicles. According to the Manheim Used Vehicle Value Index, wholesale used-vehicle prices rose by 4.9% year-over-year in April 2025, with SUVs and luxury vehicles leading the gains. Analysts project that ongoing inventory shortages and elevated demand will see prices continue to rise throughout 2025, providing fleets with a valuable opportunity to offset rising acquisition and maintenance costs.
Timing is critical to maximize value
Effective remarketing depends heavily on timing. Delaying sales can result in reduced asset values as vehicles age, while premature selling may cause fleets to miss out on the benefits of rising market trends. Aligning remarketing initiatives with new-vehicle delivery schedules when possible ensures operational continuity and maximizes financial returns.
Recommendations for optimal remarketing
- Track market indicators regularly
Use tools such as Manheim’s index or market projections to stay updated on pricing trends and market conditions.
- Coordinate remarketing with replacement deliveries
If possible, align selling schedules with fleet acquisition timelines to reinvest proceeds efficiently and reduce downtime. Replacement criteria and acquisition timelines often vary based on client needs and OEM schedules. Incorporating flexibility into planning and maintaining proactive communication with all stakeholders can help reduce delays and improve coordination.
- Integrate resale expectations in TCO planning
Embed anticipated resale gains into total cost of ownership calculations to better predict financial outcomes and improve lifecycle management.
Opportunity out of chaos
Q2 2025 has highlighted the intricate interplay of cost, operational, and market challenges facing fleet leaders today. Yet, these hurdles come with opportunities for those willing to adapt their acquisition, maintenance, and remarketing strategies.
Element’s Strategic Advisory Services can help guide you through these uncertain times with trusted expertise. Get in touch with us to learn more.
