Presented by Sandown Motor Holdings

The importance of managing total cost of ownership when buying commercial vehicles

 ·15 May 2024

For fleet operators and businesses, managing the total cost of ownership (TCO) when purchasing a commercial vehicle is critical.

TCO refers to the total cost associated with owning, operating, and maintaining a vehicle over its entire lifecycle and is a critical factor for fleet operators because it provides a framework for managing costs, improving profitability, mitigating risks, and enhancing overall competitiveness in the marketplace.

There are several factors which influence the TCO of a commercial vehicle.
For the business owner, these elements are typically classified as Capital Expenditure (CAPEX) and Operational Expenditure (OPEX).

Vehicle purchase price, vehicle modifications such as trailers and branding, and license and registration fees are considered CAPEX, whilst elements such as fuel consumption, maintenance costs, insurance premiums, driver salaries, tolls and depreciation form part of the business’s OPEX.

Both CAPEX and OPEX expenditure need to be carefully considered to ensure absolute efficiency, as there is no “one size fits all” when it comes to building and managing a fleet.

Plan for future costs

While the purchase price of a commercial vehicle is an important factor, it should not be the primary or initial consideration.

The operational efficiency, maintenance costs, fuel consumption, finance structure, and the vehicle’s suitability for the intended purpose are all critical aspects to consider.

The TCO, which includes not only the purchase price but also the ongoing costs throughout the vehicle’s lifespan, therefore provides a more comprehensive understanding of a business’s investment in its fleet.

A holistic approach considering all these factors will lead to a more informed and beneficial decision when purchasing a commercial vehicle.

For example, different trucks are designed for specific purposes and payloads, and choosing the correct truck for your application ensures that you’re maximizing efficiency in terms of fuel consumption, load capacity, and productivity factor.

In contrast, using an oversized or underutilized truck for a particular task can result in unnecessary expenses and decreased efficiency.

The same principle applies to safety. Trucks that are properly matched to the type of goods being transported and the route conditions can minimize the risks associated with overloading.

Furthermore, trucks that are properly sized and equipped for the job at hand will return better fuel consumption and require less unplanned maintenance and downtime.

Sandown Commercial Vehicles

Sandown Commercial Vehicles understands that no two businesses are the same and uses a specialized TCO approach to seamlessly align with each client’s highly specific requirements.

As a leading distributor of Mercedes-Benz Trucks, Vans, and Buses, as well as FUSO Commercial Vehicles, Sandown Motors proudly offers the pinnacle of fuel efficiency, safety, and reliability in the South African Commercial vehicle market.

With over four decades of experience in the South African automotive sector, Sandown Motors has grown and evolved with the industry, earning a reputation as a top expert in Total Cost of Ownership.

Understanding that business cash flow and related factors serve as crucial determinants in procurement decisions, Sandown Motors integrates these considerations into its TCO assessments, emphasizing the intricate relationship between costs and benefits.

With a combined 150 years of experience in the trucks sales team alone, the team is detail-driven and conducts an in-depth analysis of every client.

Daimler Truck Financial Services

Access to Daimler Truck Financial Services (DTFS) further enhances Sandown’s customers’ value chain proposition.

DTFS possesses an in-depth understanding of the commercial vehicle industry, enabling it to offer excellent bespoke finance contracts.

This specialized financial service, combined with Sandown’s expertise in commercial vehicles, allows it to provide a comprehensive solution that goes beyond the mere purchase of a vehicle, thereby enhancing the overall customer experience.

Additional benefits

As an added benefit to the customer, Sandown Motors offers a 2-day driver training course with every truck sold, further enhancing the operational efficiency and safety of every truck on the road.

Mercedes-Benz FleetBoard and Uptime are provided free of charge for 60 months for every truck sold, serving as a comprehensive fleet management system designed to optimize the efficiency, productivity, and safety of your commercial vehicle fleets.

These services include fleet monitoring and tracking, driver performance monitoring, fuel efficiency management, and maintenance management. They also enable proactive maintenance management by monitoring vehicle health and performance in real-time.

Optimise your TCO

Sandown Commercial Vehicles’ ultimate goal is to provide not only a TCO scenario but also a tool to aid in decision-making.

The company even conducts real-life fuel tests using its own demo fleet to determine the most accurate running costs, preferring not to rely on generic data but actual real-world figures based on the South African road network and climate.

Whether you are a large fleet operator or an aspiring entrepreneur looking to enter the freight and logistics sector, Sandown Commercial Vehicles stands as the ideal partner to assist you on your journey.

With a profound understanding of total cost of ownership and a proven track record in delivering tailored solutions, we offer not just vehicles, but a pathway to efficiency and profitability.

Click here for an obligation-free consultation with the team at Sandown.

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