What a work vehicle really costs a trade business

A work vehicle is the second largest thing most trade businesses own, after the people. Almost none of them know what one costs a year.

The repayment is visible every month and is rarely half the total. The rest arrives as separate invoices that nobody adds together.

Seven costs, and only one is obvious

• Finance or depreciation, the part everybody counts.
• Fuel, which moves with the work and the driver.
• Servicing and repairs, rising sharply after the warranty ends.
• Tyres, which a loaded ute eats faster than anybody expects.
• Registration and insurance, annual and easy to forget.
• Fitout, from racking to a canopy, spread across the vehicle's life.
• Downtime, the day the van is in the workshop and nobody earned.

The last one never appears on an invoice and is often the largest single item in a bad year.

Cost per vehicle, not per fleet

A fleet total hides the one vehicle eating the budget. Three vans averaging well can contain one that costs double the other two.

Recording each cost against a specific vehicle takes no longer than recording it at all. Nothing else ever identifies the expensive one.

Cost per kilometre makes vehicles comparable

Annual spend cannot compare a van doing forty thousand kilometres with a ute doing twelve. Dividing by distance puts them on the same footing.

That figure also prices travel properly. A business that knows its real rate per kilometre can quote a distant job without guessing.

Downtime deserves a number

A vehicle off the road costs the day's work, not the repair. For a one person business that is the whole day's revenue.

Recording days off the road beside repair costs changes which vehicle looks expensive. A cheap van that spends a week a year in a workshop is not cheap.

Replace on evidence, before the failure

Most trade vehicles get replaced after a breakdown, at the worst moment and at whatever price is available that week.

A vehicle whose annual cost has risen for two years running is telling you the same thing with more notice. Our guide to an equipment register covers keeping that history where it can be read.

Fitout follows the vehicle, or it does not

Racking, drawers and a canopy cost thousands and rarely transfer cleanly. Buying the same model twice makes them transferable and cheapens the next change.

That is a real argument for standardising a fleet, and it usually outweighs a better deal on a different make.

Private use needs a rule, not a discussion

A vehicle a person takes home is part of their arrangement, and vague arrangements generate resentment and tax questions both.

A written rule about private use, fuel cards and who pays for what removes an awkward conversation each year. It also makes the cost per vehicle mean something.

Buying, leasing and hiring answer different questions

Outright ownership is cheapest over a long life and worst for cash. A lease protects cash and costs more across the term.

Short term hire suits a spike in work that may not last, and it turns a fixed cost into a variable one for a season.

The right answer follows the cashflow rather than the total cost, which is why a profitable business sometimes leases and a cash rich one buys.

Fuel cards tell you more than they save

The discount is small. The record is the point, because it shows litres per vehicle, per week, without anybody keeping a log.

An unexplained rise in one vehicle's fuel points at a mechanical fault, a heavier load or changed work. All three are worth knowing early.

What to change first

• Every vehicle cost records against that vehicle, not the fleet
• Downtime counts in days, beside the repair invoice
• Annual cost divides by distance, so vehicles compare fairly
• A rate per kilometre prices travel on distant quotes
• Two rising years starts a replacement conversation, not a breakdown
• Private use follows a written rule