Fleet cost · Free calculator

Fleet Vehicle Replacement Calculator

Every year a vehicle loses less value but costs more to keep running. This calculator finds the age where those two lines give the lowest average yearly cost, checks whether your current vehicle has passed it, and works out the full cost per km, tire cost per km and the cheapest way to acquire the next one.

  • Runs in your browser
  • Any currency, km or miles
  • Formulas shown below

Including body, fit-out and registration.

%

Share of the price you could sell it for after one year.

%

Of the remaining value, per year.

 / year

%

Use your own records for older vehicles of the same type.

 / year

Insurance, licenses, tracking. They do not move the best age but are part of the yearly cost.

Used for cost per km.

%

Your borrowing rate or required return. Use 0 to ignore.

years

Optional. Checks whether keeping it one more year still pays.

years

How this is calculated
value after year n = price × value after year 1 × (1 − yearly loss)^(n − 1) running cost in year n = maintenance year 1 × (1 + rise)^(n − 1) + other yearly costs average yearly cost (n) = (price − value after n + running costs) ÷ n, discounted when a rate is set economic life = the n with the lowest average yearly cost keep one more year when = value lost that year + interest on value + running cost < lowest average

Full methodology is below.

Economic lifeBased on values entered

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Fleet replacement report

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  • Your inputs and units
  • Economic life by year
  • Keep or replace check
  • Cost per km and tire cost per km
  • Buy, lease or rent and method

What is a fleet vehicle replacement calculator?

A fleet vehicle replacement calculator finds the age at which a vehicle is cheapest to own on average, often called its economic life. A new vehicle loses most value early, while its maintenance and repair bills are low. An older vehicle loses little value each year, but costs more to keep running. Added together, the average yearly cost falls, reaches a lowest point, then rises. Replacing near that point keeps the cost of the fleet down.

The same page works out three related numbers fleet managers are asked for: the full cost per km of a vehicle, the tire cost per km with and without retreads, and whether buying, leasing or renting costs less over the same period.

Why vehicle replacement timing matters

  • Keeping too long means rising repair bills, more breakdowns and more days off the road, which delaying the purchase no longer offsets.
  • Replacing too early means paying for the steepest part of depreciation again and again.
  • A replacement policy based on cost, not habit, gives finance a figure to plan capital spending around.
  • Cost per km is the number customers, pricing teams and budgets understand. Knowing how much of it is fixed tells you how far cost per km would fall if the vehicle did more work.

What data do you need to time a vehicle replacement?

InputWhere to find itTip
Purchase priceSupplier quote or last invoiceInclude body, fit-out and first registration.
Resale valueDealer buy-back offers, auction results, past disposalsAsk for values at 3, 5 and 7 years and fit the two percentages to them.
Maintenance and repairsWorkshop invoices by vehicle and ageCompare vehicles of the same type at different ages to estimate the yearly rise.
Other yearly costsInsurance, licenses, permits, trackingThey raise the cost per km but do not change the best replacement age.
Tire prices and lifeTire supplier, tire removal recordsRecord the odometer at fitting and removal.
Lease and rental quotesLessor and rental proposalsCheck what is included: maintenance, insurance, distance limit, return conditions.

How to calculate the economic life of a vehicle

Value over time

Value after year 1 = Price × Value after first year % Value after year n = Value after year 1 × (1 − Yearly loss %)^(n − 1)

Running cost by year

Maintenance in year n = Maintenance in year 1 × (1 + Yearly rise %)^(n − 1) Running cost in year n = Maintenance in year n + Other yearly costs

Average yearly cost and economic life

Cost of keeping n years = Price − Value after n years + Running costs for years 1 to n Average yearly cost = Cost of keeping n years ÷ n Economic life = the number of years with the lowest average yearly cost

When you set a discount rate, each yearly cost and the resale value are discounted to today, and the average becomes an equivalent annual cost: the steady yearly amount with the same present value. This is the usual way to compare ownership periods of different lengths.

Keep or replace

Cost of one more year = Value lost that year + Value at the start × Discount rate + Running cost that year Keep while Cost of one more year ≤ Lowest average yearly cost of a new vehicle

Cost per km

Cost per km = (Fixed costs per year + Variable costs per year) ÷ Distance per year Fuel per km = L/100 km ÷ 100 × Fuel price

Tire cost per km

New tires = Tires × (Price + Fitting) ÷ Tire life With retreads = Tires × (Price + Fitting + Retreads × (Retread + Fitting)) ÷ (Tire life + Retreads × Retread life)

Worked example: when to replace a truck

A truck costs 120,000. After one year it is worth 80% of that (96,000), then loses 15% of its value each year. Maintenance and repairs are 5,000 in the first year and rise by 25% a year. Insurance and licenses add 6,000 a year, and money costs 6%.

  • The equivalent annual cost is lowest at 6 years: 33,337 a year, or about 0.278 per km at 120,000 km a year.
  • The current truck is 7 years old. Keeping it through year 8 would cost 5,431 in lost value (36,206 to 30,775), 2,172 in interest on its value, 23,842 in maintenance and 6,000 in other costs: 37,445.
  • That is 4,108 more than the 33,337 average of a new truck, so on cost alone it is time to replace.
  • For cost per km, a truck covering 120,000 km a year with 23,000 of fixed costs, fuel at 32 L/100 km and 1.10 a liter, 9,000 of maintenance, tires and 1,500 of other costs comes to about 0.664 per km, of which 29% is fixed.

How to read your replacement results

  • The economic life is the age to plan replacements around. A flat curve means a year either way makes little difference; a sharp curve means timing matters.
  • The keep-or-replace line compares next year's cost for your vehicle with the average cost of a new one. When next year costs more, replacement is the cheaper path.
  • The fixed share of cost per km shows how far cost per km would fall if the vehicle covered more distance. A high fixed share means utilization is worth working on.
  • Tires with retreads usually cost less per km where casings are managed well. Check the result against your own removal records.
  • Buy, lease or rent compares cost only. Flexibility, cash flow, balance sheet treatment and service levels belong in the decision too.

Common mistakes in replacement decisions

  • Using purchase price minus resale as the whole cost. Rising repairs and downtime are what make older vehicles expensive.
  • Assuming the same maintenance every year. With flat running costs the cheapest option is always to keep the vehicle, which is rarely true.
  • Comparing a lease with buying without matching what is included. Add maintenance, insurance and excess distance where the lease leaves them out.
  • Ignoring the cost of money. Paying 120,000 today is not the same as paying 2,900 a month for four years.
  • Mixing vehicle types. Run the calculator per type and duty; a city van and a long-haul tractor age very differently.

Assumptions and limits

Results are estimates based on the values entered. Value follows a first-year drop and a steady yearly loss, and maintenance rises at a steady rate; real figures vary. Downtime, fuel efficiency gains in newer models, tax and accounting effects are not included unless you add them to running costs. Costs are treated as end-of-year amounts. Use the result to support a replacement policy, not to replace a quote from your finance team or lessor.

Related Safee solution

Base replacement decisions on recorded distance and use

Safee Fleet Reporting gives you trip, distance and vehicle usage reports by vehicle, driver and time range, in PDF or Excel, so the distance and use behind your cost per km come from records rather than estimates.

  • Trip and location reports with distance, duration and driver per trip.
  • Vehicle performance and utilization reports covering engine activity and vehicle usage.
  • Fuel and environmental reports for fuel consumption and emissions.
  • Scheduled delivery of reports daily, weekly or monthly, in PDF or Excel.
Questions

Vehicle replacement and cost per km questions, answered

Need help with your own fleet figures? Talk to Safee.

When should I replace a fleet vehicle?

On cost alone, when keeping it one more year costs more than the lowest average yearly cost of a new one. That point is the economic life. Safety, reliability, emissions rules and customer requirements can bring it forward.

What is the economic life of a vehicle?

It is the ownership period with the lowest average yearly cost, combining value lost, maintenance and repairs, and other running costs. It depends on your prices, resale values and how quickly repairs rise with age.

How do I calculate cost per km for a truck or van?

Add the fixed yearly costs (depreciation or lease, finance, insurance, licenses and, if you include it, the driver) to the variable yearly costs (fuel, maintenance, tires and other running costs), then divide by the distance driven in the year.

What is equivalent annual cost?

It is the steady yearly amount that has the same present value as all the costs of owning a vehicle for a given period, net of resale. It lets you compare keeping a vehicle 4 years with keeping it 7.

How do I calculate tire cost per km?

Divide the price of a tire plus fitting by the distance it lasts, then multiply by the number of tires on the vehicle. With retreads, add the retread and fitting cost to the top and the retread life to the bottom.

Is it cheaper to buy or lease fleet vehicles?

It depends on the price, resale value, lease terms and what each option includes. Buying is often cheaper in total over long periods, while leasing and renting trade cost for flexibility and predictable payments. Compare the same period, distance and services.

Why does the discount rate matter?

Money paid today costs more than the same amount paid later, because it could be used elsewhere or borrowed against. A discount rate makes a purchase today and monthly payments over several years comparable.

Does this calculator include tax and accounting effects?

No. It compares costs before tax and does not apply depreciation rules, VAT recovery or lease accounting. Ask your finance team to adjust the result for these.

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