Calculate your own Total Cost of Ownership

To calculate the TCO of any vehicle you’re thinking of buying, consider the following:

Negotiated purchase price – this will only rarely be the Recommended Retail Price advertised on the manufacturer’s website, unless it’s a special offer Drive Away price. Many manufacturers offer discounts for fleet or ABN buyers that aren’t advertised.

Cost of any options - or accessories not included in the above. More expensive models often include cameras, reversing sensors or bulkheads as standard, all at additional cost on less expensive vehicles.

Fuel consumption - You can get up-to-date and average fuel cost information at http://www.aip.com.au/pricing/retail.htm (add roughly 15-20% to the Combined Cycle number on the windscreen sticker for diesel models, and 30-35% for petrol models, for a more representative ‘real world’ fuel consumption figure that takes into account driving styles, traffic conditions, your typical payload, etc.)

Cost of finance - including any application or account keeping fees, and dealer charges which may be levied separately to the cost of the vehicle finance.

Insurance - (including in some cases personal injury insurance applied separately for any employees that might drive your vehicle).

Service cost – consider both scheduled and routine service. ‘Scheduled Services’ are those that must be performed at set time or distance intervals, like an oil or filter change. ‘Routine Service’ covers wear and tear parts that are replaced depending on driving style and driving conditions, like the clutch plate or brake rotors. Also consider tyres – there are plenty of websites with consumer product reviews that will give you a good idea of the likely life span of the tyres fitted to your van, and their replacement cost.

Repair cost – can be hard to ascertain, but if you want a rough idea, ask the cost of common repair items like headlights, windscreens, mirrors or bumper bars. Not necessarily a cost you’ll be directly exposed to, but if your insurance premiums are expensive, this is usually a contributing factor.

Resale value – can affect the TCO equation. Organisations like Red Book and Glass’ Guide will give you a good idea of your vehicle’s market value at 3, 4, 5 years, etc. Consider the less tangible items like warranty and network – if your van is going to have 50,000km of warranty cover on it when you’re finished with it, it’s a more ‘sellable’ proposition than one that’s been out of warranty for 12 months.

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