Why total cost of ownership matters to you
As a rental company owner or operator, you face many decisions as you invest in new equipment. Assessing your inventory and budget, determining the best product for your fleet needs, and your acquisition cost all influence your decision-making. Then there are all those factors beyond your initial investment — your total cost of ownership.
Total cost of ownership (TCO) is the associated costs over the life cycle of your equipment. When making your equipment purchase decision, your initial investment is only part of the equation. Understanding TCO can help you to look beyond the initial acquisition price to consider the value and profitability of your equipment and, ultimately, your bottom line.
What impacts your TCO?
Many factors beyond your initial investment have an impact on your TCO: anticipated costs, such as insurance, tax and warranty, plus those other expenses and divestments that can affect your total cost of ownership. As a rental equipment owner, you’ll want to consider other cost factors that can affect your bottom line:
- Acquisition costs of getting machines into your fleet and ready for rental
- Operational costs, including scheduled maintenance, servicing, unexpected repairs, parts and training
- Resale value: A well-maintained machine from a market-leading brand will get you the best resale price when you divest the machine
- Machine reliability for maximum uptime, utilisation and rental revenue
- Machine versatility for maximum utilisation and rental revenue
Your rental revenue depends largely on utilisation and your equipment uptime – an idle machine makes no money. Downtime from unexpected or too-frequent maintenance requirements minimises utilization and cuts into your revenue. Plus, additional expenses from delays in service or obtaining the correct replacement parts add to the operating cost. When your equipment is reliable and delivers maximum uptime, you benefit from higher rental revenue and a lower total cost of ownership.
JLG’s solutions for improving TCO
Just as TCO should be factored into your equipment investment choices, your business needs and operating cost concerns are factored into our product design and development. The voice of the customer is important to us. By listening to your needs and cost concerns, we understand how TCO affects your bottom line. We continually look to our customers for ways in which we can improve our machines and help to keep our customers productive and profitable with products that deliver the performance your customer demands at the lowest total cost of ownership.
Extensive customer input on operating costs helped to drive the recent redesign of the 400S and 450AJ boom lifts. These products were carefully reengineered with lower TCO in mind, and now feature cost-saving upgrades:
- Improved serviceability: 400S and 450AJ boom lifts have fewer components to maintain and better access to parts for diagnostics and repair
- Longer service intervals in JLG telehandlers keep machines rental-ready
- Greater durability and diminished wear and tear from quality parts and fabrication
We’re focused on keeping you productive and profitable with products that aim to deliver lower TCO. These case studies will show you how the voice of the customer and a focus on TCO resulted in more serviceable and reliable equipment.
JLG TCO Stories