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Total Cost of Operation

Important TCO aspects

Anyone active in in the field of company cars, whether as a supplier, customer or user, could not fail to register the new phenomenon of recent years – TCO.

In conferences on automobiles and articles in professional journals, we often come across the not too accurate interpretation of the abbreviation as "total cost of ownership," which unfortunately does not fully express the essence of the matter. The truth is that in the case of corporate fleets, we are trying to ascertain the total costs associated with the maintenance of vehicles in operation, so that the correct interpretation should be "total cost of operation." If only because not all companies own their fleets. And for variety, let us mention the situation on the islands across the English Channel, where we meet up rather with the term WLC - "whole life cost", i.e. the total costs for the lifespan of the held vehicle.

 

TCO - total cost of operation, is therefore the overall cost of operating a vehicle considered from all the points of view of the company, and if possible, fair-value adjusted. Because found in the calculations of various fleet and leasing companies are apparently similar items, which, however, are different in their impact on the operation and management of the company.