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Lifecycle Costing — The True Cost of Service Vehicle Operations

For a fair return on your capital investment, it’s important to know the true cost of operating your vehicles over a defined time. Lifecycle costing is the best way to do so.  
A longtime method used in transportation, mining, construction, and utility markets, lifecycle costing looks at future replacement values, residual values, operating costs, and tax benefits to give you the most accurate understanding of the true cost of operating your vehicles. With this information, you’ll be better able to manage those costs, as well.
IMT will undertake your lifecycle costing analysis with information directly from your records. We’ll determine the point in each vehicle’s life when costly repairs are likely to be incurred, the value will be greatly diminished, and variable operating costs will become unpredictable. When the analysis is complete, you’ll know the appropriate time to replace each vehicle.
Replacement costs and resale values are key factors in an overall lifecycle evaluation. Because each package is equipped differently, the acquisition costs, maintenance costs, and future resale values vary for each vehicle type. Historical data provides some indication of future resale values but in no way guarantees them. Future resale values are greatly influenced by secondary market demand and your vehicle’s condition, as well as inflation rates and technological advancements.
To begin the process, we’ll need the following:
• An estimate of your annual mileage and engine, crane, and compressor hours, based on your fleet’s application
• Your corporate tax rate and method of depreciation; our analysis will include the tax benefits associated with depreciation
• Actual information about maintenance and repair costs
• An estimate of a value associated with downtime
If any of this information is unavailable, we can provide some assumptions for your validation.
For information on lifecycle costing, contact us.