Owning and Operating Cost

There are several methods of determining the probable cost of owning and operating construction equipment. No method will give the exact costs under all operating conditions. At best the estimate is only a close approximation of the expenses. Records of previously used equipment should provide information that may be used for the particular equipment. However, there is no assurance that similar equipment will involve similar costs, particularly if the equipment is used under varying conditions. Factors that affect the cost of owning and operating construction equipment include the cost of the equipment delivered to the owner, the severity of job conditions, the number of working hours in a year, the number of years the equipment is used, the care with which the owner maintain repairs it, and the demand for used equipment when it is disposed off, which will affect the salvage value. 

When the cost of owning and operating of construction equipment is to be estimated before it is purchased, the cost records based on past experience, will generally not be available. The costs which should be considered include capital investment and depreciation (i.e. the ownership costs) maintenance, repairs, petrol, oil, and lubrication charges (i.e. the operating costs).