Why Total Cost of Ownership is Your Top Priority

New fleet managers must focus beyond the sticker price of a vehicle. Total Cost of Ownership (TCO) is the vital metric for your first year. It includes every expense over a vehicle’s life. TCO covers the initial purchase, all fuel, all maintenance, and the eventual resale value. Consequently, you gain the power to make profitable decisions by tracking TCO. Furthermore, studies show maintenance costs increase exponentially as vehicles age, often spiking sharply in their first and seventh years. Therefore, accurately calculating TCO from day one helps you plan for these inevitable cost increases and maintain a healthy bottom line.

Calculating Your Cost Per Mile Benchmark

Understanding your Cost Per Mile (CPM) is essential for small fleets. It simplifies all expenses into one understandable number. You calculate CPM by dividing total expenses by total miles driven. For comparison, general fleet benchmarks show the overall fleet average CPM is approximately $\$0.24$ in 2025. Your goal should be to keep your CPM at or below that benchmark. Maintenance costs, which often start at around $\$0.07$ per mile, significantly impact your total CPM. Therefore, track your fuel and service costs closely, because these are two of the largest, most controllable expenses. Using telematics or fleet management software makes collecting this data much easier.

Leveraging OEM Programs for Lower TCO

Small fleets must find ways to lower the high cost of vehicle acquisition. Fortunately, Original Equipment Manufacturers (OEMs) and financing companies now offer programs designed for small and mid-size businesses. For example, some OEMs, like Volvo and Ford Pro, offer flexible financing with up to 90 days to the first payment. This is a crucial benefit for new companies managing initial cash flow. Moreover, the push toward electric vehicles (EVs) provides new opportunities. Government incentives, such as federal tax credits, and specialized state programs like the Innovative Small E-Fleet (ISEF) set-aside, help offset the high upfront cost of electric trucks, further lowering your TCO. You must research these financing and incentive options before you purchase any vehicle.

Strategic Maintenance and Replacement Planning

A rigorous preventive maintenance (PM) schedule directly fights rising TCO. You should never wait for a vehicle to break down. Proactive maintenance extends asset life and reduces expensive, unplanned downtime. For new fleets, set a tiered PM schedule, such as A, B, and C services, to ensure no critical checks are missed. Finally, TCO also guides your replacement strategy. Use your TCO data to determine a vehicle’s optimal life span before its maintenance and fuel costs become too high. This ensures you maximize your resale value when you sell the truck.

External Links:

To understand fleet financing options, visit Ford Pro Financing or similar OEM sites: https://www.fordpro.com/en-us/financing/.

For more detail on Cost Per Mile and TCO calculations, review the insights from Fleetio’s 2025 Fleet Benchmark Report: https://www.fleetio.com/blog/2025-fleet-cost-per-mile-total-cost-ownership-construction.

For government EV programs that can help your TCO, check out California HVIP’s ISEF information as an example of available incentives: https://californiahvip.org/purchasers/.

Also read: Shifting Safety Culture: Moving Beyond Reactive Crash Review