Learn · Calculator
Most owners can tell you what a machine cost to buy. Far fewer can tell you what it costs to run. Fill in what you know below and this works out your owning cost, your operating cost, and the number that actually matters: total cost per hour.
Total cost per hour
$0.00
The part most calculators leave out
Owning costs are fixed per year. Operating costs are roughly fixed per hour. So the moment your utilization moves, your cost per hour moves with it, and nothing about the machine has changed. This is the single most common reason a fleet rate is wrong.
| Annual hours | Owning per hour | Operating per hour | Total per hour | Cost per stop |
|---|
A machine at half the hours is not half the cost. It is close to double the rate.
The method
This is the standard owning and operating model used in equipment cost accounting. Nothing here is proprietary, and you should be able to reproduce every number by hand.
| Line | Formula |
|---|---|
| Depreciation, annual | (purchase price − resale value) ÷ useful life in years |
| Average investment | (purchase price + resale value) ÷ 2 |
| Cost of capital, annual | average investment × interest rate |
| Insurance, taxes, storage, annual | average investment × your percentage |
| Owning cost per hour | (the three lines above, summed) ÷ annual hours |
| Fuel per hour | gallons per hour × price per gallon |
| Lubricants and filters per hour | fuel per hour × your percentage |
| Wear parts per hour | replacement cost ÷ expected life in hours |
| Operating cost per hour | fuel + lubricants + repairs + wear parts (+ operator, if included) |
| Total cost per hour | owning per hour + operating per hour |
| Cost per stop, route mode | total cost per hour × (annual hours ÷ working days per year) ÷ stops completed per day |
Average investment is the usual simplification for the capital tied up across the life of the machine, since the balance falls as the asset depreciates. If your finance team prefers a full amortization schedule, use their number in place of this line.
Getting a better answer
| The input | What people get wrong |
|---|---|
| Annual hours | Using the hours you hoped for rather than the hours the meter shows. This is the input that moves the answer most, so take it from actual readings, not from the schedule. |
| Repairs and parts | Using a flat lifetime average. Repair cost per hour climbs as a machine ages, so a single figure understates late-life cost and overstates early-life cost. If you have the history, use the last twelve months. |
| Resale value | Carrying the number from the day you bought it. Residual moves with the market, the hours on the clock, and the condition of the machine. |
| Wear parts | Forgetting them entirely. Undercarriage on a tracked machine is often the second largest operating line after fuel. |
| Downtime | Leaving it out. This calculator does not price downtime, because it varies so much by job. If a failure idles a crew, the real cost of that hour is far above the number here. |
Common questions
Two groups. Owning costs are what the machine costs you whether it moves or not: depreciation, cost of capital, insurance, taxes and storage. Operating costs are what it costs while it runs: fuel, lubricants and filters, repairs and parts, and wear items such as tires, tracks, undercarriage and ground engaging tools. Operator wages are sometimes included and sometimes carried separately in labor, so decide once and stay consistent.
Add up your annual owning costs and divide by the hours you actually run the machine in a year, which gives owning cost per hour. Then add your operating costs expressed per hour. The sum is total cost per hour. In one line: ((depreciation + interest + insurance, taxes and storage) ÷ annual hours) + fuel + lubricants + repairs + wear parts.
Owning costs are fixed per year but get spread across however many hours you run. Operating costs are roughly fixed per hour. So when hours fall, that fixed owning cost is divided by a smaller number and cost per hour rises sharply, even though nothing about the machine changed. It is why an underused machine can cost more per hour than a busier, older one.
It depends what you are using it for. For internal rates and repair-or-replace decisions, most operators exclude wages so the figure reflects the machine itself. For job costing and bidding, wages are usually included so the rate covers the full cost of putting that machine to work. Switch it on or off above, and be consistent across the fleet.
Fuel price and utilization move constantly, and repair cost climbs with age, so a rate set once a year is usually stale by the middle of it. If you are doing this by hand, quarterly is a reasonable compromise. If your maintenance and fuel records are already in a system, it should be continuous.
Check "This is a route vehicle" in route mode, then add your working days per year and stops completed per day. The calculator takes the total cost per hour it already computed, converts it to a cost per day using your working days, and divides by stops to give cost per stop. For the full method and a worked example, see the pest control truck cost per stop guide.
Next
Cost per hour is not the destination. It is the input to the decision every owner eventually faces on every machine: keep paying to fix it, rebuild it, or replace it. For route businesses, the same number is also the starting point for cost per stop.
Repair, rebuild or replace: the numbers that actually decide it →
Torgix computes owning and operating cost per hour for every asset in your fleet, from your own labor, parts, fuel and usage records, and keeps it current as those records change. Free trial on your real fleet, no credit card required.