The number everything depends on.
WHY IT MATTERS
It determines whether a job is worth taking and what to charge.
WHAT TO INCLUDE
Fuel Driver wages and allowances Maintenance and servicing Tyres Insurance Licensing and permits Depreciation Finance cost, if the vehicle is financed Management and overheads
WHAT PEOPLE OMIT
Depreciation Tyres Their own time Idle days
WHY DEPRECIATION MATTERS
The vehicle is being consumed, and replacing it requires money set aside.
HOW TO ESTIMATE IT
Purchase price less expected resale, divided by expected lifetime kilometres.
WHY TYRES DESERVE SEPARATE TREATMENT
They are a substantial, predictable cost that arrives in lumps.
HOW TO CALCULATE
Total annual cost for a vehicle, divided by kilometres actually run.
WHY ACTUALLY RUN
Estimated distance overstates utilisation and understates cost.
WHAT TO MEASURE
Odometer readings, recorded.
WHAT TO SEPARATE
Costs that vary with distance: fuel, tyres, some maintenance
Costs that continue regardless: insurance, licensing, wages, depreciation
WHY THE SEPARATION
It shows what an idle vehicle costs.
WHAT TO CALCULATE ALSO
Cost per day, for a vehicle doing nothing.
WHAT THAT NUMBER REVEALS
Why utilisation dominates everything.
WHAT TO REVIEW
The figure, whenever fuel prices move.
