Know true ownership costs before you buy. Model depreciation, interest, insurance, and operating expenses accurately. See cost per hour and rental break-even instantly here.
| Parameter | Example | Notes |
|---|---|---|
| Purchase Price | $250,000 | Base equipment cost |
| Down Payment | 20% | Financed remainder |
| Interest / Term | 10% / 5 years | Standard equipment loan |
| Ownership Period | 5 years | Analysis horizon |
| Annual Hours | 1,200 hr | Utilization assumption |
| Fuel Use / Cost | 6 units/hr, $1.20/unit | Energy cost driver |
| Maintenance + Repairs | $8/hr + $6/hr | Service and corrective work |
| Fixed Ownership Costs | $8,300/yr | Insurance, tax, license, storage |
| Downtime | 40 hr/yr at $100/hr | Delay or idle crew impact |
| Salvage Value | $80,000 | Expected resale at end |
Total ownership cost merges capital recovery, financing, fixed overheads, and operating spend into one lifecycle metric. Purchase price, delivery, taxes, and commissioning create the capital base. Salvage value reduces net cost because resale returns cash at exit.
Report results as total cash cost, yearly cost, and cost per operating hour. Those views compare different sizes, powertrains, or duty cycles on equal terms.
Assets rarely run at nameplate utilization. Record productive hours, standby time, and weather or permit stoppages. Lower annual hours increase cost per hour because fixed items continue even when the machine is idle.
Use consistent time definitions: engine hours for plant and billable hours for hired attachments. Testing ±10–25% utilization shows exposure to schedule slippage.
Variable costs rise with use and age: fuel, routine service, fluids, filters, tires or tracks, wear parts, and corrective repairs. Operator cost can be treated as fully burdened labor. Downtime cost captures crew delay and missed sequences.
Apply an annual escalation rate for inflation. If you expect a major overhaul year, raise repairs in that year rather than averaging, so cash flow reflects reality.
Financing changes timing and total outflow. Down payment plus loan payments represent funded capital, while insurance, storage, and licensing remain annual fixed items. Discounting converts yearly net flows to present value using a chosen rate.
The equivalent annual cost converts a multi-year profile into a steady yearly amount. Depreciation is provided for accounting context, but decisions should follow cash.
A rental benchmark clarifies break-even. When ownership cost per hour is below rental, buying suits predictable workloads. When ownership exceeds rental, hire reduces risk during short projects or uncertain utilization.
Use the result to set internal charge-out rates and justify preventive maintenance funding. Revisit assumptions with actual fuel burn, repair invoices, and utilization logs.
This supports clearer bids and equipment planning.
It includes upfront purchase and setup costs, financing payments, annual fixed costs, variable operating costs, and an end-of-life salvage inflow. Results are shown as total cash cost, discounted value, and cost per hour for easy comparison.
Use your company’s required return or weighted cost of capital. For contractor-owned equipment, many teams test 8–15%. Keep the rate consistent across alternatives so the comparison reflects project risk, not changing inputs.
Include operator cost when you want a fully burdened production rate. Exclude it if operator time is budgeted elsewhere. The key is consistency: treat all options the same way so buy-versus-rent decisions are fair.
Downtime captures the impact of idle crews, missed sequences, and schedule knock-on effects. Even if repair bills look small, lost production can be expensive. Enter a realistic hourly impact based on site productivity and critical-path sensitivity.
Use recent resale data for similar age and hours, adjusted for condition and market cycles. A conservative approach is best. If uncertain, run two scenarios—low and high salvage—to see how sensitive the ownership decision is.
If you enter a rental rate, the tool compares it with ownership cost per hour. When ownership is lower, buying may be economical at your utilization. When higher, renting can reduce capital exposure and utilization risk.
Important Note: All the Calculators listed in this site are for educational purpose only and we do not guarentee the accuracy of results. Please do consult with other sources as well.