Total Cost of Ownership (TCO)
In Arabicالتكلفة الإجمالية للملكية (TCO)
Everything a vehicle costs over its life in the fleet: purchase, fuel, maintenance, insurance and downtime, minus resale value.
What is total cost of ownership (TCO) in fleet management?
Purchase price is only part of a vehicle's real cost. TCO adds purchase or lease, fuel, maintenance and parts, tyres, insurance and registration, and the cost of downtime, then subtracts resale value. It is usually compared per kilometre or per hour.
Safee does not calculate TCO directly, but it supplies its largest variable parts: maintenance and parts cost per vehicle, distance, engine hours, operation cost and fuel.
How it works
- 1Gather fixed and variable costs
- 2Divide by distance or hours
- 3Compare vehicles and models
Why does total cost of ownership (TCO) matter in fleet management?
Buying on price alone leads to cheap vehicles that are expensive to run. Replacement decisions, when to sell an old vehicle, are guesswork without its current cost per kilometre. Fleets that track TCO buy smarter, sell at the right time and price contracts with confidence.
What you gain
- Replacement decisions based on numbers
- Compare models before buying
- Sharper contract pricing
How does Safee help you calculate total cost of ownership (TCO)?
Safee supplies the variable figures that are hard to collect by hand: maintenance cost per vehicle, distance, engine hours and fuel. Add instalments and insurance from your finance records and you have cost per kilometre for each vehicle, the basis for replacement decisions.
A field example
An Al Khobar facilities-management company was about to renew maintenance contracts on 40 five-year-old vans. The team ran the Maintenance Report for a full year and found 15 of them costing SAR 0.38 per km in maintenance, against SAR 0.12 for newer vans. The company sold and replaced those 15, cutting maintenance spend by around SAR 210,000 in the first year.
Frequently asked questions
What goes into a vehicle's total cost of ownership?
Purchase or lease, fuel, maintenance and parts, tyres, insurance and registration, and downtime, minus resale value.
When is replacing a vehicle cheaper than keeping it?
When its running and maintenance cost per kilometre exceeds that of a new vehicle including instalments, or when repeated downtime drives up running costs.
Want to put this to work in your fleet?
Talk to a Safee fleet expert about your vehicles and how you operate, and we will suggest what fits.
Request a consultationSafee fleet management newsletter
Fleet management news, updates and practical tips, sent to your inbox regularly.