The sticker price is the number everyone negotiates. It's also the least important number in a fleet equipment decision. Acquisition cost typically represents 30 to 45 percent of the total money a medium-duty truck will cost your operation over its useful life — which means 55 to 70 percent of your exposure is invisible at the time of purchase. A defensible total-cost-of-ownership (TCO) model makes that invisible portion visible before you sign.
What Goes Into a TCO Model
A complete model has ten cost categories. Some are precise; others are reasoned estimates. The goal isn't a forecast that turns out to be exactly right — it's a framework that forces you to think through every major cost driver and makes your assumptions explicit and auditable.
Acquisition cost is the fully-loaded price including chassis, upfit, delivery, and any first-year title and registration fees. For an upfitted work truck, the upfit can easily represent 25 to 40 percent of total acquisition cost and should be itemized separately because it depreciates differently and may need replacement on a different schedule than the chassis. Note that under the One Big Beautiful Bill Act (P.L. 119-21, signed July 4, 2025), 100% bonus depreciation under Section 168(k) was permanently restored for qualified property acquired and placed in service after January 19, 2025 — consult your tax advisor on how this affects the after-tax acquisition cost in your TCO model.
Financing cost is the total interest paid over the loan or lease term, or the opportunity cost of the capital if you pay cash. This is often underweighted. At a 7 percent rate over 60 months on a $110,000 asset, the financing cost alone exceeds $20,000.
Fuel is the largest operating cost for most work trucks. Model it on your actual annual mileage and engine load, not EPA estimates — a service truck sitting at idle four hours a day burns fuel at a different rate than the same truck making highway runs between jobs.
Scheduled maintenance includes oil and filter changes, fuel filters, DEF fluid, coolant flushes, brake jobs, transmission service, and tire rotations. Manufacturer-recommended intervals are a starting point; duty-cycle-adjusted intervals for stop-and-go or high-idle applications are more accurate. Our preventive maintenance intervals article walks through how to adjust for work-zone and service-truck duty.
Unscheduled repairs are harder to model in year one but become patterned by year four or five. Budget these as a rising curve — low in years one and two, climbing through the mid-life period, and accelerating after year seven or eight. The inflection points correlate with emissions-system aging (DPF cleaning or replacement), turbocharger wear, and injector fatigue on high-mileage diesel engines.
Tires are a discrete, predictable cost that gets overlooked in quick TCO estimates. A Class 6 service truck in a standard single-rear-axle (4x2) configuration has six tires — two front steer tires and four rear drive tires (dual rear wheels). Commercial steer tires run $400–$600 each; drive tires $350–$600 each depending on brand and specification. At typical service-truck duty cycles, you can expect a full replacement cycle every three to five years.
Insurance varies by operation, coverage level, and claims history. Get an actual quote for the configuration you're modeling. Don't use a fleet average if the unit you're evaluating has a different risk profile — TMA trucks carry a different liability exposure than a standard service truck.
Downtime cost is the most undervalued line in most TCO models. When a truck is out of service, you're paying fixed costs (insurance, financing) without generating revenue or productivity. Assign a daily cost based on what it actually costs your operation to have a truck unavailable — crew standby time, subcontract costs, or lost billable days.
Residual value is subtracted at the end of the model period. Get realistic estimates from dealers or auction data for comparables, not the optimistic figure a salesperson uses to close a deal. Medium-duty trucks with high mileage and significant upfit tend to have thin resale markets; budget conservatively.
Disposal costs include decommissioning, transfer fees, and any costs to remove specialized equipment. For TMA trucks, removing an attenuator mount and returning a chassis to baseline condition for resale has a real labor cost.
Worked Example: Class 6 Service Truck
Consider a hypothetical Class 6 service truck — say, a Freightliner M2 106 or International MV607 chassis with a service body, crane, and auxiliary power — with the following assumptions:
- Acquisition cost (chassis + upfit): $108,000
- Hold period: 8 years
- Annual mileage: approximately 12,000 miles, primarily local/regional with significant idle time
- Financing: 60-month note at current commercial rates, then owned outright
Over eight years, the cost stack looks roughly like this:
- Financing cost on the 60-month note: approximately $18,000–$22,000 depending on rate
- Fuel (diesel at recent Heartland prices, ~8 mpg effective with idle load, ~1,500 gallons/year): approximately $55,000–$70,000 over the hold period depending on price movement
- Scheduled maintenance (oil, filters, DEF, coolant, brakes, transmission service): approximately $25,000–$35,000 cumulative, rising in later years
- Unscheduled repairs: approximately $8,000–$12,000 in years one through four, rising to $15,000–$25,000 in years five through eight as emissions components age
- Tires (two full replacement cycles at six tires per cycle): approximately $4,500–$7,200
- Insurance: highly variable, but budget $4,000–$7,000 per year at typical commercial rates
- Downtime cost: even at a conservative $300 per day and 12 days of unplanned downtime per year, this is $28,800 over the hold period — a number most operators ignore entirely
Totaling these against a residual value estimate of $15,000–$20,000 for a well-maintained, high-mileage Class 6 chassis, you arrive at an all-in cost well north of $300,000 for a truck that cost $108,000 to acquire. The acquisition cost is roughly 30 percent of the total picture.
That ratio changes if you hold the truck longer (residual drops, late-life repairs climb), run higher mileage (fuel dominates), or operate in a high-theft or high-collision environment (insurance climbs). The model is only as good as the inputs you feed it.
Using the Model to Make Decisions
A TCO model earns its keep in three specific decision contexts.
Replacement timing. When annual operating cost for an aging unit exceeds the annualized cost of a replacement, it's time to replace. Plot unscheduled repair costs per year against the curve — the year costs jump significantly is usually the inflection point.
Lease vs. purchase. A TCO model lets you compare total cost under different acquisition structures on an apples-to-apples basis. See our leasing vs. purchasing article for the framework.
Specification decisions. When choosing between two chassis configurations or two upfit options at different price points, a TCO model will often show that the more expensive upfront option has lower total cost — or vice versa. The $4,000 premium on a better crane or a heavier-duty PTO rarely looks expensive when spread across eight years.
The discipline of building the model — even a rough one — changes how you evaluate every fleet purchase. It shifts the conversation from "what does it cost?" to "what does it cost to own?" Those are very different questions.
Talk to us
If you're building a TCO model for a service truck or TMA truck purchase and want a second set of eyes on the numbers, call us at (940) 600-5131 or use the /contact form — we're happy to compare notes on real-world cost data from our service work.