The elevator industry profits from confusion about contract types. Property managers hear terms like "full service," "examination," "oil and grease," and "hybrid" without clear guidance on which actually saves money. The answer depends on three things: equipment age, callback history, and your tolerance for budget surprises.
Contract Types Explained
Full Maintenance (FM), also called full service or comprehensive coverage, works like a warranty. Parts break, they get fixed. Monthly costs are higher, but you do not see repair invoices. FM covers scheduled maintenance visits, all parts replacement (with standard exclusions), labor for repairs, and callback response at no additional charge.
Oil & Grease (O&G), also called examination or limited coverage, covers only maintenance itself. Technicians visit, lubricate, inspect, and adjust. When something breaks, you pay for parts and repair labor separately. Monthly costs are lower, but every callback generates an invoice.
Middle options exist. Examination contracts cover minor parts (contacts, batteries, bulbs) but exclude major components. Hybrid structures might provide full coverage except controllers, which are often the first components to fail and the most expensive to replace.
The Real Cost Comparison
The numbers tell the story. Based on our analysis of current market rates:
| Contract Type | Monthly Cost/Unit | Annual Cost |
|---|---|---|
| O&G/Exam | $2,000-$4,000 | $24K-$48K |
| Full Maintenance | $3,500-$9,000 | $42K-$108K |
FM costs roughly double what exam costs. The question is whether that premium is worth it.
Three Scenarios
New Equipment (Under 10 Years)
On a five-year timeline with new equipment, O&G wins decisively. Contract costs on O&G run approximately $150K versus $300K for FM. Add expected callbacks ($5K) and minor parts ($3K), and you are looking at $158K total versus $300K. That is $142K in savings. New equipment rarely fails. Paying double for insurance against unlikely events burns money.
Mid-Life Equipment (10-20 Years)
The math starts shifting. Same contract costs, but now you are facing $15K in expected callbacks, $25K in probable parts, and a 50% chance of needing controller boards ($5K-$6K). O&G total: roughly $195K. FM: $300K. O&G still saves around $105K, but the margin narrows and risk increases.
Aging Equipment (Over 20 Years)
Here is where the decision gets interesting. O&G still looks cheaper on paper: contract ($150K) plus callbacks ($25K) plus controller (80% probability, $8K-$10K) plus door operator (60% probability, $12K-$14K) plus machine or HPU (30% probability, $18K-$24K). Total: $213K-$223K versus FM at $300K.
But that "30% probability" on a machine failure? That means one in three buildings pays $60,000+ beyond their contract. On paper, O&G saves $77K-$87K. In reality, you are gambling.
The Variance Problem
This is what elevator companies do not explain clearly. FM provides certainty. O&G provides average savings with high variance.
For a portfolio of 50 buildings, averages matter. For your single building, averages mean nothing. You either get the major failure or you do not. FM is insurance. O&G is self-insurance. The real question is not "which costs less on average" but "can I absorb a $60K surprise?"
When Full Maintenance Wins
Equipment Over 20 Years Old. Modern machine-room-less elevators were designed for approximately 20-year lifespans. The first MRLs are now 25 years old, and machine seizures from internal bearing issues are becoming common. At this age, failures shift from "possible" to "probable," often in sequence. FM provides predictable expenses when predictability matters most.
High Callback History. If you are seeing 8-10+ callbacks per year per unit, you are either dealing with equipment that needs modernization or a vendor underperforming on maintenance. Either way, you are bleeding money on every service call under O&G. FM absorbs those costs.
Proprietary OEM Equipment. Buildings with Otis Gen2, KONE EcoSpace/MonoSpace, Schindler 3300/5500, or TKE Synergy face single-source parts suppliers. The OEM sets prices. There is no competitive bidding. FM locks in a rate. O&G leaves you exposed to whatever the manufacturer decides to charge next quarter.
Budget Certainty Requirements. Boards and CFOs appreciate fixed annual costs without surprise capital requests. FM simplifies reporting, eliminates variance explanations, and prevents awkward emergency funding requests. The premium pays for predictability.
When O&G Saves Money
New Equipment. Paying the FM premium on a five-year-old elevator is paying insurance on something that will not break. The exception: proprietary equipment (see above). Even new, parts pricing uncertainty exists.
Large Portfolios. Property managers with 10+ units can negotiate volume callback pricing, reduced parts costs, and priority response without premium rates. The variance problem shrinks when spread across many units. What devastates a single-building owner averages out across a portfolio.
Modernization Planned Within Three Years. If you are modernizing soon, the controller and door operators are getting replaced anyway. Paying FM premium on equipment you will scrap is waste. Run O&G through the modernization window, then switch to FM on the new equipment. Controller-only modernization runs $50K-$70K; that money should go into the project, not into premiums for components being removed.
Sophisticated In-House Management. If your team tracks callback history rigorously, reserves funds for major repairs, manages vendor relationships proactively, and can evaluate repair versus replace decisions intelligently, O&G becomes manageable. You are essentially self-insuring with competent risk management.
Hidden Traps in Both Contract Types
FM Exclusions. "Full" does not mean everything. Standard exclusions include code work required by new regulations, acts of God, vandalism, cab finishes, telephone equipment, and often firefighters' service testing. ADA compliance modifications, seismic upgrades (especially in California), and pit clearance changes are almost never covered. Read the exclusions list. It matters.
O&G Parts Markup. When you buy parts on O&G, you pay wholesale cost plus vendor markup (30-50% standard, sometimes exceeding 100% on proprietary components) plus shipping plus installation labor. A $500 part becomes $1,200 on your invoice. This is standard, not abuse; it is how the contract cost structure works.
Testing Coverage Disputes. Annual safety tests are usually included in both contract types. Five-year full-load tests ($2,000-$4,000) are often excluded. CAT 1/3/5 tests vary. State and city witness fees are almost always excluded. Clarify testing coverage before signing, not when the test invoice arrives.
The Decision Framework
| Your Situation | Recommendation |
|---|---|
| Equipment under 10 years, non-proprietary | O&G |
| Equipment under 10 years, proprietary (OEM) | FM or hybrid |
| Equipment 10-15 years, low callbacks | O&G with reserves |
| Equipment 10-15 years, high callbacks (8+/yr) | FM |
| Equipment 15-20 years | FM strongly preferred |
| Equipment over 20 years | FM required |
| Modernization planned under 3 years | O&G through mod |
| Budget certainty required | FM regardless of age |
| Portfolio of 10+ units | O&G with volume pricing |
| Single unit, aging equipment | FM (variance too high) |
The real question: "Do I want predictable premiums or variable costs with potential savings?" This is risk management, not just accounting.
Negotiating the actual terms matters as much as choosing the type. And understanding what callbacks actually cost helps you evaluate whether your current contract makes sense.
Not Sure What Your Contract Actually Covers?
Upload your existing agreement to our Contract Scanner. In 60 seconds, you will see exactly what is included, what is excluded, and where you are exposed. The difference between "probably covered" and "actually covered" can be $50,000.
Copyright 2026 ElevatorBlueprint. Analysis based on current market data and industry practitioner research.