When you operate a construction fleet, expenses can have a major impact on your business decisions. Every piece of equipment you own costs time and money, meaning it’s important to find ways to make the most of its service lifespan.
With enough skill and experience (or with the help of a reliable dealer), you can learn how to calculate the total cost of ownership for your heavy equipment. This will help you make smarter purchase decisions, make more accurate investment predictions and determine costs vs. gains over time.
Calculating heavy machinery ownership costs requires you to consider several factors. While you probably already know that heavy equipment purchase price plays a part, this is only one of many elements to take into account when calculating overall expenses. Some of the other potential costs to keep in mind include:
If you’re confident enough to do the math on your own, you’ll need to add the purchase price of the machine to any yearly maintenance, repair, tax, insurance, interest and fuel costs. Once you’ve added up all these factors, subtract the resale price and divide the number by the total operating hours — this will provide an estimate of the hourly cost of your machine.
It’s usually easiest to do this with a piece of equipment you’ve owned for a long time, as you already have all these records available. Through years of experience, you may even be able to do these calculations when you first buy a machine to predict its long-term value.
A faster way to add up expenses is to use a heavy equipment total cost of ownership calculator. You can find these online, and although accuracy can vary, it’s easy to punch in numbers for a quick answer. If you want to make earlier predictions about your investment, we recommend talking to your dealer for more accurate estimates.
Your local Cat® dealer can help you calculate the total cost of ownership for your heavy equipment. Reach out today for pricing information or more details about your equipment’s current value.