Total Cost of Ownership

Posted by Billy Claunch, on October 2, 2020

How much is that fire truck? 

That, of course, is a question we answer every single day. The reality is, even in our business, the number varies based on certain factors; delivery, warranty term, paint/no-paint, service/no-service, the timing of the purchase, is it today or in 60 days? 

People just want to know, "How much is this truck going to cost them."

But how do we answer that question accurately? What is included in the simple word "cost"? 

When you buy something, it also signs you up for other "costs" down the road. How do you plan for an account for that? It can be a difficult process, but let's try to break it down into its components.

How much does it cost to own a fire truck?

"cost" According to our friends at Oxford Languages, (found via Google), is:

1. (of an object or action) require the payment of (a specified sum of money) before it can be acquired or done.

2. an amount that has to be paid or spent to buy or obtain something.

Further, there are 2 main types of costs. "Hard Cost" meaning, it's easily measurable and something you write a check for, "Soft Cost," meaning it's harder to measure (Labor, time spent on a project that could have been used on other projects - opportunity cost, etc.)

 Keeping this mind, the general areas that make up the Total Cost of Ownership of a Fire Truck are:

  1. Pre-Planning and Truck Purchase Process
  2. Truck Purchase Cost
  3. Truck financing costs
  4. Truck maintenance costs
  5. Truck repair costs
  6. Truck liquidation value

"How much does that cost" is a very simple question, but with a very complex answer. 

How do we get an accurate view of this, so we can know we are spending our taxpayer's dollars in the best way for them and for our Fire Department?

We will break each of these costs down in detail in further articles. In the meantime, keep an eye on the costs, and think about how this can help in your next truck purchase.

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