TCO – Why (and How) You Should be Calculating Total Cost of Ownership for Your Fleet

“Total Cost of Ownership (TCO) is a financial estimate that uses purchase/lease price of an asset plus operating costs (both direct and indirect costs) to determine the dollar amount spent on an asset during its life cycle. TCO is used by fleet managers to estimate the value of a certain asset, the value of a department, and the overall value of an entire business. TCO calculations and cost analysis can be used to make informed decisions around purchasing, selling, leasing, expanding or downsizing a fleet… Knowing what your TCO is will help you better understand your return on investment (ROI) and will help you identify opportunities for areas to save on costs. Calculate TCO early and often to gain a complete understanding of the cost of doing business. As you do your calculations, take note of key areas for improvement such as fuel efficiency, maintenance costs, fees from violations, and more. Take advantage of telematics technology to assist in your TCO analysis and to reduce costs.”Originally Posted on Verizon Connect