Monthly truck cost: how to calculate it

To understand a truck's monthly cost, you need to know what makes up these costs and the best way to calculate each group without mixing units of measurement.

That is why keeping a record of the costs, the amount paid, the date expenses occurred and the reason is essential for more efficient, highly precise management. Supporting documents should show the amount paid and that it corresponds to an operating expense.

Learn below:

• What is a truck's monthly cost?
• Types of monthly truck cost;
• How do you calculate a truck's operating cost?

What is a truck's monthly cost?

A truck's monthly cost is influenced by several factors, from acquisition cost to the number of corrective services performed over time.

However, this cost is not constant from month to month. It can vary significantly, being higher in months when mechanical failures require major repairs and lower in months when the vehicle only undergoes preventive inspections.

To determine a truck's monthly cost, you need to understand all costs this vehicle type generates in the fleet. You also need to keep the same comparison basis: monthly costs should be added to monthly costs; daily or hourly costs should be converted before entering the overall calculation.

Types of monthly truck cost

A truck's fixed costs

Costs that remain constant over time are considered fixed fleet costs. For a truck in Brazil, these include licensing, IPVA (vehicle ownership tax), depreciation and mandatory insurance.

These amounts should first be used to calculate the truck's monthly fixed cost:

Truck monthly fixed cost = Annual cost / 12 months

If the operation also needs to see the cost per day of use, the monthly cost can then be divided by the number of days the vehicle is used in the month:

Truck daily fixed cost = Monthly fixed cost / number of days of use in the month

A truck's variable costs

Any cost that varies over time is categorized as a variable fleet cost. For a truck, this encompasses expenses such as refueling, vehicle maintenance, tire purchases and upkeep, lubricants, among others.

Managing variable costs is more complex and challenging than fixed costs because there is no precise way to create standards for all vehicles and routes. It is therefore essential to implement management methods and systems that facilitate data collection and storage.

This makes accessing and interpreting fleet routine information more practical, while reducing the risk of decisions based on isolated expenses or expenses without a history.

For example, one aspect of variable costs is the average truck maintenance cost, which by nature requires close, individualized control. After all, it considers everything from purchasing replacement parts to vehicle servicing.

Inventory costs, interior and exterior vehicle cleaning, labor for preventive and corrective services and tools used in the process are also considered.

This reinforces the need for solid fleet planning and efficient organization in each department of your operation.

Other types of monthly truck cost

For a deeper understanding of how heavy vehicles operate, you can calculate different types of costs beyond a truck's fixed and variable costs.

Truck asset cost is one example, considering all amounts from vehicle acquisition to disposal at the end of its useful life. This calculation is important for assessing new vehicle purchases and identifying which models offer the best metrics and value for money for your fleet.

Another alternative is calculating cost per trip, an indicator that assesses mileage traveled, driver expenses such as meals, lodging and overtime, and vehicle depreciation. With this data in hand, you can analyze areas for improvement, such as route optimization.

Reviewing fine costs is also important, as it may signal problems in your driver and route management. Identifying the main occurrences and highest amounts, which are generally the most serious violations, provides a solid basis for implementing the most appropriate corrective measures.

Costs of an idle truck

An idle truck's cost mainly includes lost opportunities and the driver's daily pay. Opportunities are lost when the vehicle is not operating to generate or meet new service demand, whether because it is loading or unloading products or stopped for mechanical failure repairs.

Under Brazilian law, the maximum time a truck can remain stopped for loading or unloading is 5 hours. To avoid problems, it is essential to have evidence of arrival and departure times at the facilities where this occurs.

Exceeding this established limit results in a compensation amount determined by law.

The driver's daily pay is a relevant additional cost because every driver has a daily limit of working hours, and exceeding those hours requires applying overtime rates. In addition, longer routes already involve more expenses, such as meals and lodging.

Cost per idle hour (CIH) is calculated from the truck's monthly fixed cost (MFC), total hours worked with the truck and the service remuneration and administration rate.

The calculation is: CIH = MFC / hours worked X remuneration rate

Because CIH is an hourly amount, use it in the monthly cost according to the idle hours recorded in the period. This avoids adding a monthly basis to a unit amount without first considering the number of idle hours.

How do you calculate a truck's operating cost?

Besides calculating each item individually, as shown in the fixed, variable and idle truck cost calculations, you also need to understand a truck's monthly total cost.

To do this, use all amounts obtained for the same period and add them in a single calculation:

Truck Monthly Total Cost = Monthly Fixed Cost + Month's Variable Costs + (CIH X idle hours in the month)

To assess a truck's monthly cost, apply this formula using only data for the period in question. Repeat this procedure month after month to understand cost variation over time and compare vehicles, routes or cost centers on a more consistent basis.

Want to start understanding a truck's monthly cost better? Use our free resources! We have everything from a truck maintenance cost spreadsheet to materials for controlling fines and associated expenses. See them all here (in Portuguese).