It'll cost ya

Entrepreneur, Dec, 2002 by Jill Amadio

FIGURING OUT HOW MUCH YOU WILL SPEND ON your commercial vehicles during their life cycles, commonly estimated at five years, affects your buying or leasing choices. The many operating costs you should consider include fuel, tires, repairs and routine maintenance such as tuneups, oil changes, alignment, tire rotation, and brake and transmission service. Add depreciation, insurance, finance fees and state fees, and your total could be pretty high if you choose vehicles that require premium gas or have poor fuel economy.

An example of life-cycle costs: Ford's F-250 Lariat Super Duty Crew Cab, a full-sized pickup that lists for $30,645, will depreciate by $15,214 after five years, with fuel costing $8,415, maintenance $2,025, repairs $746, financing $6,567, insurance $6,125 and state fees $553. While depreciation costs decline during a vehicle's life cycle, annual repairs usually escalate over time, so hanging on to an older vehicle that is used daily eventually ends up costing more in both downtime and repairs.

One of the best ways to estimate life-cycle costs is to use the National Association of Fleet Administrators' (NAFA) CD-ROM, an interactive educational tool (www.nafa.org; $99 for NAFA members, $125 for nonmembers). In addition, the program offers advice on selecting vehicles; when to replace vehicles; whether to buy, lease or establish a company reimbursement program for employees; and which alternative fuel to select. Another resource is the Intelli Choice Small Truck Cost Guide (www.intellichoice.com, $54), which breaks down projected ownership costs, resale value and purchase prices.

ONLINE EXCLUSIVE

For a detailed list of cost breakdowns for today's bestselling commercial vehicles, visit www.entrepreneur.com/mag/wheels for charts and a link to the leading fleet leasing publication, Automotive Fleet.