How do I calculate the total cost of ownership (TCO) of a car?
The total cost of ownership (TCO) of a car is not just the purchase price. To calculate it correctly, you add up all the costs over the vehicle's life — leasing, fuel, insurance, maintenance, tyres and depreciation — and relate them to the kilometres driven. That is how you find out what each fleet vehicle really costs you.
Short answer
- You start from the purchase cost or the sum of leasing instalments over the holding period.
- You add fuel: average consumption × kilometres × price per litre.
- You add insurance (RCA, CASCO), road tax, ITP inspection and annual taxes.
- You add maintenance: scheduled services, mechanical work, winter and summer tyres.
- You subtract the residual value (depreciation) and divide the total by mileage for the cost per km.
TCO components and how much they weigh
Typical structure of the total cost of ownership
| Component | What it includes | Indicative share |
|---|---|---|
| Depreciation | The vehicle's loss of value | 30–40% |
| Fuel | Consumption × km × price per litre | 20–30% |
| Maintenance | Scheduled services, mechanical work, tyres | 10–20% |
| Insurance & taxes | RCA, CASCO, road tax, vehicle tax | 10–15% |
A worked example for one vehicle
Example: a car bought for 90,000 lei, kept 4 years and 100,000 km. Fuel: 7 l/100 km × 100,000 km × 7 lei/l = 49,000 lei. Insurance: ~10,000 lei. Maintenance and tyres: ~14,000 lei. Residual resale value: 45,000 lei (depreciation 45,000 lei). Total TCO = 45,000 + 49,000 + 10,000 + 14,000 = 118,000 lei. Cost per km = 118,000 / 100,000 = 1.18 lei/km. That figure tells you whether the vehicle is profitable or should be replaced.
Common mistakes when calculating TCO
- Looking only at the purchase price and ignoring depreciation — often the largest component.
- Estimating fuel from memory instead of using the real consumption per km.
- Forgetting seasonal tyres, even though across a fleet that means thousands of lei a year.
- Not comparing TCO between vehicles — you keep cars that are expensive to own without realising it.
How 4fleet helps
- Automatically aggregates all costs per vehicle: leasing, fuel, insurance, maintenance and tyres.
- Calculates TCO and cost per km based on the real mileage entered in the system.
- Compares vehicles against each other, so you know which is worth keeping and which to replace.