Fleet Costs in 2027: Why 2026 Ran Hot and What to Budget for Next Year
If your 2026 fleet spend landed well above plan, the market explains most of it. Fuel, steel, maintenance labor, insurance and financing all moved against fleets this year, and several of them moved in the opposite direction from what forecasters expected last winter. For fleet managers building 2027 budgets, the job has two parts: explain the 2026 variance in terms finance will accept, and set 2027 assumptions that hold up if conditions shift again.
2027 may bring some relief. Fuel prices are forecast to fall from their 2026 highs, OEM fleet incentives on several core work trucks and vans have grown for the 2027 model year, and insurance increases are leveling off. Those offsets give fleet managers room to plan for 2027 without assuming a repeat of 2026.
This guide walks through each major cost category, compares 2025 to 2026, and lays out what the leading forecasts say about 2027.
The 2026 Forecast That Didn't Hold
Most 2026 fleet budgets were built on reasonable assumptions. At the beginning of the year many believed fuel prices would keep declining, possibly to the lowest annual average since 2020, and expected the Federal Reserve to keep cutting its benchmark rate. Similar outlooks recommended a 10 to 14 percent buffer on operating budgets for continued price increases.
Both of the big assumptions reversed. Middle East supply disruptions pushed crude and diesel sharply higher by spring, and on September 16 the Federal Reserve raised its target range by a quarter point to 3.75 to 4 percent, citing elevated inflation.
That context matters for your variance explanation. A budget that tracked the consensus in January was exposed to conditions no one priced in. Framing the overrun around external, documented market shifts keeps the conversation focused on 2027 planning.
Fuel: The Largest Single Swing
Fuel accounts for the biggest year-over-year change for most light-duty and service fleets.
| U.S. retail average | 2025 actual | 2026 forecast | 2027 forecast |
|---|---|---|---|
| Gasoline (per gallon) | $3.10 | $3.91 | $3.56 |
| Diesel (per gallon) | $3.66 | $5.19 | $4.49 |
Gasoline figures and 2026–2027 diesel figures come from the EIA Short-Term Energy Outlook released October 6, 2026. The 2025 diesel average comes from EIA data reported by Rigzone.
On those numbers, diesel is running about 42 percent above 2025 and gasoline about 26 percent above. September was the peak so far, with gasoline averaging $4.35 and diesel $6.29, according to the EIA. The agency attributes the run-up to constrained Middle East oil flows, attacks on Saudi Arabia's East-West pipeline, and severe tightness in diesel markets.
Diesel carries extra risk heading into 2027. U.S. distillate inventories are expected to stay below the 2021–2025 five-year low through much of next year, and Axios reported that before the Iran conflict, EIA had expected 2027 diesel to average $3.47. Its current forecast sits about a dollar higher.
How Much Lower in 2027?
Fuel is the category with the most relief built into the forecast. EIA's October outlook projects Brent crude falling from $96 a barrel in 2026 to $84 in 2027, with pump prices following. Across EIA's two most recent outlooks, the 2027 forecast puts gasoline between $3.35 and $3.56 a gallon and diesel between $4.40 and $4.49.
| Fuel | 2026 average (forecast) | 2027 forecast range | Expected savings per gallon vs. 2026 |
|---|---|---|---|
| Gasoline | $3.91 | $3.35 to $3.56 | 35 to 56 cents (9 to 14 percent) |
| Diesel | $5.19 | $4.40 to $4.49 | 70 to 79 cents (13 to 15 percent) |
The low end of each range is EIA's September 2026 forecast for 2027, as noted in the October outlook and reported by Axios. The high end is the October 2026 forecast. Savings compare both against EIA's October estimate of the 2026 average.
For diesel fleets, that range works out to $700 to $790 less for every 1,000 gallons purchased.
What to expect in 2027: Lower fuel spend than 2026, with two cautions. Even the low end of the range leaves diesel about 20 percent above its 2025 average. And Goldman Sachs expects diesel refining margins to stay above $40 a barrel through 2027, roughly double the historical norm, as reported by Tekedia. Diesel-heavy fleets should plan at $4.50 and model a $5.00 scenario for the first half of the year.
Vehicle Acquisition: Work Segments Are Rising Fastest
In general, new-vehicle inflation looks mild. The Kelley Blue Book average transaction price for August 2026 was $50,089, up 1.9 percent from a year earlier.
The segments fleets buy most tell a different story. In the same data set:
- Average van transaction prices climbed 7.2 percent year over year
- Full-size pickups rose 2.1 percent
- Compact SUVs rose 1.1 percent
Tariffs are a large part of the reason. Industry voices interviewed by Work Truck in January said automakers largely absorbed tariff costs in 2025 and would begin passing them through in 2026.
Financing adds a second layer. With the Fed moving rates up in September, lease and finance costs on new units are higher than many fleets assumed at the start of the year.
OEM Fleet Incentives: Richer for 2027
Fleet incentive programs are one place where 2027 looks better than 2026. For example, Ford's National Fleet Incentive (56M) program raises per-vehicle incentives on several core work vehicles for the 2027 model year:
| Vehicle | 2026 model year | 2027 model year |
|---|---|---|
| Super Duty pickup, Regular and Super Cab | $1,000 | $2,500 |
| Super Duty pickup, Crew Cab | $1,000 | $1,500 |
| Super Duty chassis cab | $500 | $1,000 to $3,000, by configuration |
| Transit van, low roof | $1,000 | $2,000 |
| Transit van, medium and high roof | $1,000 | $1,500 |
| Bronco Sport | $500 | $1,000 |
Figures from Ford Pro's 56M National Fleet Incentives sheet dated August 4, 2026.
Other automakers have also published 2027 programs. Hyundai's 2027 commercial program lists incentives from $1,000 to $5,500 per vehicle across much of its lineup.
These programs carry more weight than usual this year. Retail incentives have tightened, falling to 6.5 percent of the average transaction price in August from 7.2 percent a year earlier, according to Kelley Blue Book, and Cox Automotive's third-quarter forecast update expects automakers to hold that pricing discipline. Fleet-specific programs are the clearest source of added value heading into 2027.
What to expect in 2027: Our read: tariff pass-through is still working its way through model-year pricing. Budget for acquisition costs to keep rising, with vans and trucks running ahead of the overall market, and offset part of that increase by building 2027 model-year fleet incentives into acquisition plans. Revisit financing assumptions regularly.
Upfits: Steel Is the Pressure Point
Upfit pricing tracks metal costs closely, and metal costs have moved sharply. Nucor's spot price for hot-rolled steel coil was $910 per ton in July 2025 and $1,135 per ton in July 2026, an increase of roughly 25 percent.
Trade policy is a direct driver. In August 2025, the administration expanded 50 percent steel and aluminum tariffs to 407 additional derivative product codes, applied to the metal content of those goods. The Work Truck panel flagged upfit components, steel-intensive parts and delivery timing as areas where tariffs would show up for fleets.
What to expect in 2027: Upfitters typically reprice with a lag, so 2026 steel costs are likely to show up in 2027 quotes. Request quotes early, confirm how long pricing is valid, and ask suppliers whether quotes include metal surcharges.
Maintenance and Repair: Labor Leads the Increase
The Consumer Price Index for August 2026, as reported by Autobody News, showed motor vehicle maintenance and repair up 5.2 percent year over year. Within that figure, maintenance and servicing rose 7.9 percent and repair rose 2.6 percent. Fleets running vehicles longer feel this most. Aging assets leave fleets more exposed to labor inflation, tariff-related parts increases and downtime.
What to expect in 2027: Nothing in the current data points to easing labor costs. Plan for maintenance spend to rise at or above the 2026 pace, especially on units past their planned replacement point.
Insurance: Leveling Off
Insurance is the clearest sign of stabilization. Personal auto insurance prices fell 5.1 percent over the 12 months ending in August, according to the Consumer Price Index as reported by Autobody News. The broader commercial market has softened as well. Premiums across all commercial accounts fell an average of 2 percent in the second quarter, according to The Council of Insurance Agents & Brokers survey reported by Insurance Journal, and WTW measured overall commercial price increases at just 0.5 percent.
Commercial auto has been the slowest line to turn, though the trend points the same way. CIAB recorded a 4.5 percent increase in the second quarter, down from 5.8 percent in the first, as summarized by ServiceMag. The Ivans Index put August commercial auto renewals at 3.58 percent, down from 4.03 percent in July, according to Insurance Journal.
What to expect in 2027: Our read: commercial auto increases keep shrinking toward flat as the rest of the insurance market softens. Fleets with telematics data, driver training and documented safety programs are best positioned for flat renewals, a point echoed by Hub International's Dave Berno in the Work Truck panel.
Resale: A Smaller Offset
Used vehicle prices eased slightly, with the CPI for used cars and trucks down 2.3 percent year over year in August, per the same Autobody News CPI report. Softer resale values reduce the offset that remarketing provides against acquisition costs, which is worth flagging in total cost of ownership calculations for 2027 replacements.
2027 at a Glance
| Cost category | 2026 vs. 2025 | Our 2027 read |
|---|---|---|
| Diesel | Up about 42% | Down 70 to 79 cents per gallon (13 to 15%) from 2026 |
| Gasoline | Up about 26% | Down 35 to 56 cents per gallon (9 to 14%) from 2026 |
| New vehicles (overall) | Up 1.9% | Modest increases, 1%-3% |
| OEM fleet incentives | Moderate improvement to fleet incentives | Larger 2027 fleet incentives on most vehicles |
| Steel (upfit input) | Up about 25% | Elevated; shows up in 2027 upfit quotes |
| Maintenance and repair | Up 5.2% | Continued increases, led by labor |
| Commercial insurance | Auto up 4.5% in Q2, slowing | Leveling off toward flat |
| Financing | Fed raised rates in September | Watch each Fed meeting |
| Resale values | Down 2.3% | Flat to slightly soft |
2026 figures are drawn from the sources cited in each section above. The 2027 column combines published forecasts and programs (fuel, incentives) with Fleet Insights' read of current trends (all other rows).
How to Build a 2027 Budget
- Split the 2026 variance into price and usage. Show what your fleet would have spent at 2025 unit prices. The gap between that figure and actual spend is the market-driven share of the overrun.
- Anchor every assumption to a public index. EIA fuel forecasts, BLS CPI categories and Fed rate decisions are sources finance teams already trust.
- Model fuel as a range. A base case, a high case and a low case give leadership a clear view of risk without locking in a single number.
- Capture 2027 fleet incentives. Confirm program amounts and order cutoffs for each model you plan to buy, and credit them against acquisition costs in the budget.
- Review replacement timing. Older units carry higher maintenance and downtime exposure, which can offset the savings from delaying a purchase.
- Get upfit quotes early. Locking pricing before 2027 repricing cycles can protect a meaningful share of the budget.
Plan 2027 With an Experienced Partner
EMKAY has helped fleets navigate cost cycles since 1946. Our team can help you model 2027 scenarios, review replacement timing and build a budget grounded in data. Call 630.250.7400 or email info@emkay.com.
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