Quality and up-time management of vehicles is today receiving much attention from vehicle manufacturers. One of the reasons is that there is a desire to avoiding on-road failures to addressing potential issues during routine maintenance intervals or at times more convenient to the operator. Forthcoming telematic platforms and advanced diagnostic algorithms can enable the possibility to proactively handle problems and minimize stops. The platforms bring the possibility of increasing knowledge of fault characteristics and making diagnostic decisions by using a population of vehicles. However, this requires real-time diagnostic algorithms that process data both onboard and offboard at a central server. The paper presents a self organizing approach for failure and deviation detection on a fleet of vehicles. The approach builds on using parametric models for encoding the characteristical relations between different sensor readings for a vehicle sub-system or component. The models are low-dimensional representations of the operating characteristics of a sub-system or component and are possible to transfer over a limited wireless communication channel. The approach is demonstrated on simulated data of an electronically controlled suspension system for detecting a slow valve and a leaking bellow.