Evaluating The Total Cost Of Ownership For A Used Freightliner
Posted on: 29 June 2018
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Before starting your business as an owner-operator, you need to evaluate what kind of return you can expect from a used semi. To do that, you will need to look at the total cost of ownership, or TCO.
Why TCO is Important
The TCO represents the price of the truck plus the costs associated with using the truck over time. You likely want your truck to work for you with as little hassle as possible for a good long while.
Figuring out the TCO will help you make an informed decision, including the long-term costs before you purchase a semi. Knowing the overall cost will help you figure out how much real value the truck will bring you and your business during the life of the semi.
What to Factor into the TCO
You can break TCO down into a few broad categories, then figure out the costs that make up those categories. When it comes to TCO, you can actually go into extremely fine details and analysis. Computer programs and applications exist to help with the more complex calculations. However, here are a few broader factors you can consider:
Fuel economy – Fuel is an ongoing cost, so the more fuel efficiency the truck has, the less you will spend over the life of the vehicle.
Downtime – When your truck is doing nothing, it's not making your business money. Evaluate how much time the truck will spend receiving maintenance, and how you can speed the process up.
Operating costs – Will you need to hire someone to drive your semi? Is the model you're looking at prone to fast wear and tear? Do you have to pay for training of some sort before using the truck? You must factor all operating costs you can think of into the TCO.
Insurance – You will need insurance, and the nature of your business will dictate how much and what type you will need.
Many of these factors come with other costs as well. For example, the cost of downtime also comes with the cost of maintenance. The operation costs can include every other factor that allows you to use your truck for business.
To figure out a TCO, you must sit down and work through all the associated costs. Once you know the costs, you can work on figuring out ways to mitigate them. When you can lower the TCO as far as you can, then it's time to consider if you should purchase a specific used semi.
Starting a truck business as an owner-operator will require you to think very hard about where every penny of your money goes. Figuring out how TCO works the first time will help you to learn and refine how you make future business purchases.
To learn more, visit a site like http://www.arrowtruck.com/.