With record-high prices on new vehicles, $4/gal. fuel, and the limited maintenance and repairs that can be performed at the ranch on newer model vehicles, how much does it cost per mile to operate a one-ton diesel ranch/town truck? Extension specialists Ron Torell (Nevada), Willie Riggs (Oregon) and Duane Griffith (Montana) have an answer.
The trio modified a Texas A&M University Excel software program to generate an automobile spreadsheet calculator that determines cost per mile of operation. They used actual costs of operating their personal one-ton diesel truck vehicles (Table 1), which approached 70¢.
Table 2 shows that as miles driven per year increase, cost of operation per mile declines dramatically. This is easily explained by economy of size. Fixed cost, such as insurance, license, taxes, interest and depreciation, are spread over more miles.
Tables 3 and 4 show the impact of fuel economy on cost of operation per mile driven. Interestingly, while the cost of fuel did impact the bottom line, it was not as significant as the number of miles driven per year. Again, this has to do with spreading those fixed costs over more miles.
Vehicles in this example were purchased used. When using a “dream” $40,000 purchase price for a new vehicle, the cost of operation per mile driven rose from 67¢ to 91¢/mile. All other input variables were left the same, recognizing that many input costs, fixed and variable, would change.
Adding a low-mileage vehicle
The authors then explored leaving the one-ton diesel sit idle until needed for big jobs such as pulling trailers and heavy loads. Miles driven were reduced from 20,000/year to 5,000 on the big vehicle, and a small used economy pickup was purchased for day-to-day use. The smaller vehicle was driven 15,000 miles/year.
Cost per mile driven on the one-ton rose to an amazing $1.36/mile. Cost per mile driven on the smaller used vehicle was 34¢. Total cost of maintaining both vehicles amounted to $11,888/year.
As seen in Table 1, total cost of maintaining the one-ton vehicle only and running it 20,000 miles amounted to $13,352/year. This favors maintaining two vehicles as described above by a mere $1,464/year, a smaller amount than one would expect.
As the price of fuel increases past $4/gal., the option of operating the second vehicle becomes more attractive. One certainly has to factor in the inconvenience of not having tools, carry capacity and pull power readily available at all times should you choose to operate the second vehicle.
Editor's Note: Run your own figures by requesting a free copy of the automobile calculator. Contact authors Ron Torell at 775-738-1721 or [email protected]; Willie Riggs at 541-883-7131 or [email protected]; or Duane Griffith at 406-994-2580 or [email protected].