TCO

Question 1

What are the goals of a TCO Analysis?

Answer 1

To give decision makers a reasonable forecast of what it will cost the business to acquire and manage a particular vehicle based on a specific holding period and funding method. We use conservative estimates to project expenses in all areas of fleet management.

Question 2

What do we need in order to complete a TCO?

Answer 2

Agreed upon assumptions and estimated expenses

Question 3

What are the expenses we need in order to estimate a TCO?

Answer 3

The company's current buy
The price they resell for currently
Interest (if financing)
Maintenance records
Fuel
Insurance
Other costs (taxes/downtime/administrative)

Question 4

What is Cost of Capital?

Answer 4

The opportunity cost of spending money instead of investing it. This is based on the borrowing rate vs the expected return on investment

Question 5

What is a common tax benefit for small business?

Answer 5

Section 179, allows businesses to deduct the full depreciation of a vehicle in the first year