Calculating TCO: understanding total fleet costs

Direct and indirect cost items

When calculating TCO, you look beyond the monthly lease payment or depreciation. Direct costs include fuel, electricity, insurance, periodic maintenance, and necessary repairs.

Indirect costs are at least as crucial for the final amount. These include the administrative processing of invoices, vehicle downtime due to damage, and potential parking costs for employees.

Why focusing on TCO is smart

A vehicle with a favourable lease payment might still turn out to be more expensive overall due to higher fuel consumption or maintenance costs. By performing a TCO calculation beforehand, you can compare different models fairly.

With our TCO calculator, you can quickly and clearly calculate what vehicles will cost your organisation over their entire lifespan.

Step-by-step plan for an accurate analysis

To achieve a reliable calculation, you follow a fixed number of steps in which you combine historical data with future expectations.

• Inventory fixed and variable contract conditions per vehicle.
• Estimate the annual mileage per driver as realistically as possible.
• Consider the available charging or refuelling infrastructure.
• Evaluate the expected residual value and replacement times at the end of the contract.

Which factors influence the TCO of a company car?

Furthermore, fiscal aspects are crucial. Changes in rules regarding addition to taxable income (bijtelling), passenger car and motorcycle tax (BPM), and motor vehicle tax (MRB) have a direct impact on TCO. Finally, one must consider the development of the vehicle's residual value, which affects any depreciation costs or the price upon sale after the lease period. All these elements require a thorough analysis to obtain a realistic picture of the total costs over the entire useful life of the company car.

• Fuel or energy consumption
• Insurance premiums and damage costs
• Maintenance and repair costs
• Tax regulations and depreciation

How do you integrate TCO insights into your procurement policy?

Effective integration also requires periodic evaluation of TCO models and actual costs. By collecting data on fuel consumption, maintenance, and damage of the current fleet, the accuracy of future TCO calculations can be improved. This enables organisations to continuously adapt and optimise their policy, leading to a sustainable and cost-conscious fleet. The goal is a fleet that not only meets operational needs but also performs optimally financially throughout its entire lifecycle.

Frequently asked questions