Fleet costs in the TCO analysis

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Patrick Ineichen

CEO and partner procorp GmbH

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TCO stands for “Total Cost of Ownership” and describes the total cost of a good. For vehicles, the TCO stands for all costs incurred during the period of operation – the purchase price, all costs for maintenance, repairs, tires and tire handling, fuel, insurance, taxes and other driver and vehicle support services (e.g. replacement mobility, roadside assistance, claims settlement), labeling or interior fittings and fixtures and fittings (for commercial vehicles). Not to be forgotten is the sales value of the vehicle, so-called residual value (predicted depreciation of value with proper vehicle use), at the end of its useful life. This is used to calculate the depreciation and financing costs.

Identify cost drivers

Special attention should be paid to the interdependence of different costs (e.g. vehicle taxation based on pollutant emissions, fuel costs based on vehicle weight). The proportion of tire costs or how much the tires can drive up consumption and thus fuel costs is often underestimated. In addition to the optimal vehicle type for the intended use, individual use is also a significant cost driver (e.g. repair costs at the end of operation, insured damages that have not been settled, payout amount if a damage is not repaired).

Frequently, costs incurred by the vehicle fleet are not included in the full-cost analysis of the vehicles – an example is mobility costs incurred after a vehicle breakdown (replacement mobility), which are not charged to the individual fleet vehicle but to another account according to expenditure. Another cost block is the internal expenses for fleet management and driver support.

When operating a fleet, cost differences of a few dozen francs per month can add up to large amounts, as the vehicles are used for many years. A precise analysis of the actual amounts and a comparison with current market prices pays off immediately.

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