With record-high prices on new vehicles, $4/gal. fuel, and the limited maintenance and repairs that can be performed at the ranch on newer model vehicles, how much does it cost per mile to operate your one-ton diesel ranch/town truck? Extension specialists Ron Torell (Nevada), Willie Riggs (Oregon) and Duane Griffith (Montana) have an answer for you.
The trio modified a Texas A&M University Excel software program to generate an automobile spreadsheet calculator that determines cost per mile of operation. They used actual costs of operating their personal one-ton diesel truck vehicles (Table 1). Assuming your costs of operation are similar to those incurred on the researchers’ vehicles, the cost per mile will approach 70¢.
Table 2 shows that as miles driven per year increase, cost of operation per mile declines dramatically. This is easily explained by economy of size. Fixed cost, such as insurance, license, taxes, interest and depreciation, are spread over more miles.
Tables 3 and 4 show the impact of fuel economy on cost of operation per mile driven. Interestingly, the cost of fuel did impact the bottom line; however, not as significantly as the number of miles driven per year. Again this has to do with spreading those fixed costs over more miles.
Vehicles in this example were purchased used. The authors decided to run a scenario using their dream $40,000 purchase price new vehicle. They left all other input variables the same recognizing that many input costs, fixed and variable, would change. Cost of operation per mile driven rose from 67¢ to an amazing 91¢/mile.
Adding a low-mileage vehicle. The authors then explored leaving the one-ton diesel sit idle until needed for big jobs such as pulling trailers and heavy loads. We reduced miles driven from 20,000/year to 5,000 on the big vehicle and purchased a small used economy pickup for day-to-day use. We drove the smaller vehicle 15,000 miles/year.
Cost per mile driven on the one-ton rose to an amazing $1.36/mile. Cost per mile driven on the smaller used vehicle was 34¢. Total cost of maintaining both vehicles amounted to $11,888/year.
The total cost of maintaining the one-ton vehicle only and running it 20,000 miles amounted to $13,352/year. This favors maintaining two vehicles as described above by a mere $1,464/year, a smaller amount than one would expect.
As the price of fuel increases past $4/gal. (as of this writing), the option of operating the second vehicle becomes more attractive. One certainly has to factor in the inconvenience of not having tools, carry capacity and pull power readily available at all times should you chose to operate the second vehicle.
Run your own figures by requesting a free copy of the automobile calculator. Contact Ron Torell at 775-738-1721 or email@example.com, Willie Riggs at 541-883-7131 or firstname.lastname@example.org; or Duane Griffith at 406-994-2580 or email@example.com.
Ron Torell, Willie Riggs and Duane Griffith
Click to view tables.