CATEGORY 6 – REPAIR MAINTENANCE & TIRES

One of the most difficult cost for companies to determine is their wear & tear cost.

We have created the Truckerscost Wear & Tear Costing Method.  This process provides a more consistant method for calculating a cost per mile for Repairs, Maintenance & Tires (RMT) every month.  That is charging your customers for your wear & tear before spending money on the actual RMT.  Note that You will use the higher of actual expenses or Estimated Wear & Tear when calculating your Cost Per Mile.

THINK ABOUT THIS!!
When should you include Wear & Tear cost in your cost per mile?

1.    When you actually have the maintenance, repair or replacement done?
OR

2.    When you are incurring the Wear & Tear?  That is when you are operating your Motor Vehicle?

Tire Example
Let’s say you purchased a Motor Vehicle on January 1, 2009 that has two new front tires.  Under normal operations these tires should be good for 85,000 miles.  Let’s assume that you replaced these tires in September 2009 after driving 85,000 miles.  The new tires cost $850.00.  The tires Wear & Tear cost in this example is $0.01 per mile ($850/85,000).

QUESTION:
When do you include the penny per mile in your cost?

1.    When you replaced the tires in September 2009?

OR

2.    When you began operating your Motor Vehicle starting January 1, 2009.

ANSWER:
When you begin operating your Motor Vehicle starting January 1, 2009

EXPLANATION:
If you wait until September to include the penny per mile in your cost, your customers prior to September would not have been charged for the tire wear & tear.

CAUTION!!
This only applies to the NORMAL components that are routinely maintained, repaired or replaced every year.  You do not want to over estimate your wear & tear cost by including major cost items that can happen but is not expected.

If you overstate the expenses you will not have confidence in your Cost Per Mile number.  Use numbers that you can take to the bank!!!

KEEP IN MIND THAT OVER ESTIMATING YOUR COST IS JUST LIKE NOT KNOWING YOUR COST!!!!

Remember these are the costs that you are certain you WILL have. You will need to estimate how much money you think you will spend on Repairs for the next 12 months.

What to Consider:

Think about the last 12 months when calculating your estimate.  DO NOT include major expenses that could happen but is not expected to occur.  If you or your mechanic know that you will have to replace your clutch within the next 12 months then you would include this amount.

Below is a calculation example.

Remember these are the costs that you are certain you WILL have. You will need to estimate how much money you think you will spend on Maintenance for the next 12 months.

What to Consider:

Think about the last 12 months when calculating your estimate.  Common costs would be annual cost for Preventative Maintenance (PMs) and Parts.

Below is a calculation example.

Remember these are the costs that you are certain you WILL have.  You will need to estimate how much money you think you will spend on Tires for the next 12 months.

What to Consider :
Think about the last 12 months when calculating your estimate.  Your cost should include tire cost plus dismount and mount costs.

Below is a calculation example.

REPAIRS – includes work performed on Motor Vehicle in which main or major components are repaired or replaced which allows the motor vehicle to function safely.

Examples – Starter, A/C compressor, Clutch, Engine work, Transmission work, etc.

What expense do you have when you have repairs? REPAIR EXPENSE

MAINTENANCE – includes work performed on your Motor Vehicle in which minor components are repaired or replaced which maintains proper operating functions.

Examples – Preventative Maintenance (PMs), lights, air hose, air bags replacements, etc.

What expense do you have when you have maintenance?

MAINTENANCE EXPENSE

TIRES – includes any work on tires or wheels

Examples – Tire replacement (new or recaps), Patching flat, etc

What expense do you have when you have to replace or fix tires?  TIRE EXPENSE

Learn Cost Reduction Tips

REPAIRS –   The CRITICAL part of any repair is fixing it right the first time.  Remember as a consumer your best option for lowering your cost is to shop around but remember to use a qualified and reliable mechanic.

PREVENTIVE MAINTENANCE (PM) – It is a FACT that regular maintenance on your Motor Vehicle is crucial in minimizing major (which equals expensive) repairs.   Preventive maintenance is more than changing the oil. A good mechanic will check filters, break lines, fluids, hoses, belts etc.

TIRES  – Make sure that your steer tires are balanced and all tires are properly inflated.  You’ve paid for them.  Get the most out of them.  Properly Inflate your tires.

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