ForConstructionPros.com

U nderstanding the day-to-day owning and operating costs is crucial to managing your vocational trucks. "At the end of the day, you need to know what the value of your vehicle is and what it is costing you on a daily basis," says Steve Higgs, medium-duty truck marketing manager, General Motors.

Accurately tracking the overall life-cycle costs is a powerful management tool. "Close tracking of life-cycle costs is especially important to ensure profitability in your business," says Matt Gervais, product manager, Sterling Truck Corp., "and for making future truck buying decisions."

One of the first considerations is the purchase price and how it is depreciated over time. "But then you have the operational side, which is all of the fuel costs and all of the maintenance costs," says Mike Eaves, product manager, medium-duty trucks, General Motors. "And it is not just the truck we are talking about, but any equipment installed on the truck, as well. Really, it is the total operating cost of the vehicle. You have to look at it from a holistic approach. It is one piece of capital equipment with the body installed."

Determine cost drivers
The largest component of life-cycle costs really depends on how long you intend to keep the truck. "If you are keeping these vehicles 10 or 15 years, the service and fuel costs are going to add up to a considerable amount," says Higgs. But if you keep vehicles an average of eight years, he estimates one-third of your life-cycle costs is likely front-end expense; another third is the cost to run the vehicle, including maintenance and fuel; and the remainder is residual.

When calculating costs over the life of a vehicle, Gervais recommends taking the following into account: regular preventive maintenance (oil, tires, chassis lubrication, etc.); unscheduled repairs (breakdowns, accidents); and fuel consumption. "Variations in fuel price affect the total life-cycle cost, especially if an operator is operating over several regions," he points out.