Ownership plus operating
Every truck has two cost streams. Ownership accrues by the year whether the wheels turn or not. Operating accrues by the hour and the mile. Add both, divide by the hours the truck is actually out, and you have a rate you can put on jobs.
| Ownership per year | |
|---|---|
| Depreciation: ($48,000 − $11,000 resale) ÷ 8 years | $4,625 |
| Insurance, registration, permits | $3,600 |
| Loan interest | $1,900 |
| Ownership per year | $10,125 |
| ÷ 900 hours on the truck per year | $11.25 / hr |
| Operating per hour | |
| Fuel: 2.8 gal/hr × $4.10 | $11.48 |
| Maintenance and repair: 7% of price ÷ 900 hrs | $3.73 |
| Operating per hour | $15.21 |
| Truck cost per hour | $26.46 |
The hours denominator is everything
900 hours a year is about 3.5 hours a day, 250 days. If your truck is really out 6 hours a day, ownership per hour drops to about $6.60. If it is out 2 hours a day, it climbs to $20. A second truck bought "for busy days" that runs 300 hours a year costs more per hour than the first truck, not less. Buy the second truck when the first is out 1,500 hours.
Hourly vs. per-mile: use both
For routing decisions it helps to split the truck into an hourly part (ownership, crew, overhead) and a per-mile part (fuel, tires, wear). A dump run 38 miles away costs the hourly rate for the round trip and $0.62 a mile for the distance. That split is what shows you the cheap landfill on the far side of the county is the expensive one.
What to do with the number
- Put truck cost per hour on every job hour: loading, driving, dumping. A 2.75-hour job carries about $73 of truck.
- Add it to crew cost and overhead per hour to get your break-even per job hour (about $116 on these numbers) and price from there.
- Set aside the depreciation share every month. When the truck dies in year eight, the replacement is funded by every job it did.
Common mistakes
- Pricing the truck at fuel. Fuel is 43% of the cost here. The rest still has to be paid.
- Counting the truck payment as overhead. Then it gets spread over hours the truck was not used, and truck-heavy jobs are underpriced.
- Ignoring resale. A truck that resells for $11,000 costs less to own than one that goes to scrap. Buy the model that holds value.