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Equipment total cost of ownership calculator

See what a piece of equipment really costs to own, not just to buy. It adds the purchase price to the fuel, maintenance, and insurance across the years you keep it, then credits the resale value at the end, so the total on the page is the number the sticker price was hiding.

§ 01 Your numbers

Change anything. The answer updates as you type.

The all-in price to buy it, including delivery and setup.
How long you will keep the equipment before selling or retiring it.
A year of fuel, power, or consumables to run it.
A year of servicing, wear parts, and repairs. Rises as the equipment ages, so use an average across the life.
A year of insurance, licensing, and any storage or yard cost.
What it will be worth when you sell it. Credited against the total, because you get it back.
Total cost of ownership
$90,400
  • Purchase price$40,000
  • Fuel or energy (8 yr)$32,000
  • Maintenance & repairs (8 yr)$20,000
  • Insurance & storage (8 yr)$6,400
  • Less resale value recovered-$8,000
  • Cost per year of ownership$11,300
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$30,000 to $100,000 over the life is typical for real equipment. The running costs likely exceed the purchase price; treat them as the main number.

What this assumes, and where it could be wrong

Every one of these is a place the number could be off. They are here because you should be able to check our working, not because we are hedging.

THE PURCHASE PRICE IS USUALLY THE SMALLER HALF OF THE TOTAL.
Over a normal ownership life, the fuel, the maintenance, and the insurance added together often match or exceed the price you paid to buy the thing. That is the whole reason to compute a total cost of ownership: a cheaper machine that drinks fuel and breaks down can cost more to own than an expensive one that does not, and the sticker price hides it completely

Maintenance rises with age, so use an average. A new machine barely needs servicing; an old one needs a lot, including the big rebuild or component replacement partway through its life. Putting the average annual figure in, rather than the low first-year number, is what keeps the total honest.

Resale value is credited because you get it back. TCO subtracts what the equipment is worth at the end, since selling it returns cash. A machine that holds its value has a lower true cost of ownership than its running costs alone suggest, which is a real reason to buy quality that resells well.

This does not include financing interest or the time value of money. If you borrowed to buy, the interest is a real cost on top; and a dollar spent in year eight is worth less than one spent now. Both are second-order next to the running costs, but for a large, long-lived asset they are worth adding with an accountant.

The defaults are ours and are a starting point. The price, the years, and the three running-cost lines are yours, and the total is only as honest as the maintenance figure, which is the one people most like to underestimate.

Frequently asked questions

What is total cost of ownership?
It is everything a piece of equipment costs you across its whole life, not just to buy: the purchase price plus fuel, maintenance, and insurance over the years you own it, minus what you sell it for at the end. The calculator above adds it up. The total is almost always a large multiple of the running costs people carry in their heads, and often more than the purchase price.
Why does total cost of ownership matter?
Because a machine that is cheaper to buy can cost more to own than a pricier one that runs efficiently. A lower sticker price can hide higher fuel use, more downtime and repairs, and poor resale, and over a normal life those swamp the purchase saving. Comparing two options on TCO, not price, is how you avoid buying the expensive-to-run bargain.
What should I include in equipment TCO?
The purchase price and setup, fuel or energy, maintenance and repairs, insurance, licensing, and storage, across the years you will own it, then subtract the resale value. For a fuller version, add financing interest if you borrowed and the cost of downtime when the machine is out of service. The calculator covers the main lines.
How do I lower the total cost of owning equipment?
Buy something that runs efficiently and resells well, maintain it on schedule so small problems do not become rebuilds, keep it long enough to spread the purchase over real use, and insure and store it sensibly. The purchase price is the one line you pay once; the others repeat every year, so that is where the total is really won or lost.

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