As with any business organization, cost reduction and efficiency are key objectives in year-to-year strategy. Fleet managers are actively aiming to keep costs at a minimum, especially with how quickly they can add up when dealing with high-value assets. In order to know where costs can be cut, it is essential to fully understand each vehicles’ total cost of ownership (TCO).

TCO is the sum of all costs associated with acquiring a vehicle and keeping it operating throughout its lifecycle. This number can be expressed as an overall TCO or broken down into cost per mile, making it simple for managers to compare vehicles’ cost-efficiency. Of course, this makes TCO very subjective to a vehicle’s projected lifespan, as well as fluctuating factors like fuel costs and taxes.

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