Total Cost of Ownership

Total Cost of Ownership (TCO)

Confused in choosing which Vehicle to Buy? Check out Droom TCO. Calculate and compare the Total Cost of Ownership of up to 3 Vehicles side by side.

Total Cost of Ownership
Select Vehicles for TCO
* Add minimum one Vehicle.
* All fields are mandatory.
  • Bikes
  • Scooters

 

What is Total Cost of Ownership?

Total cost of ownership is a data science-based tool which calculates the total money that anyone will have to spend owning a Vehicle for a period of five years. This tool also gives a user the ability to compare up to three Vehicles based on total cost of ownership and make an informed buying decision. This tool gives the total cost of ownership for each vehicle in comparison as a whole number and also the split up for the accumulating cost.

How it works?

Step 1

Choose Vehicle 1

Make, Model and Trim

Step 2

Choose Vehicle 2

Make, Model and Trim

Step 3

Choose Vehicle 3

Make, Model and Trim

Step 4

Enter Monthly Running KMs

In Kilometers

Step 5

TCO results

Click Submit to get the TCO results

TCO Methodology:

Total cost of ownership tool takes the input from a user like the three cars to compare (Make, Model and Trim) and Monthly Running in Kilometers. This tool then calculates the following and displays the result.

Steps in Calculation:

  1. Initial price of the car (Ex-Showroom)
  2. Insurance Cost for a period of 5 years
  3. Fuel Expense for a period of 5 years depending upon the monthly running kilometer and mileage of the car.
  4. Tire change expense of the car depending upon the tire size and monthly running kilometer.
  5. Regular maintenance/ Service Cost
  6. Lost opportunity in the investment to be made for the car
  7. Depreciation of the car over a period of 5 years

The tool makes the calculations and gives the result in two forms.

  1. Total cost of ownership of three cars as a whole number
  2. Individual cost split up for a period of five years in a graphical comparison form

TCO Glossary:

Insurance Cost: It is mandatory for every vehicle running on Indian roads to have an insurance coverage both for the vehicle and third party. This Insurance requires a premium to be paid every year. The sum of premiums of the vehicle for a period of five years gives the insurance premium.

Fuel Cost: Every vehicle returns different mileage. Depending upon the monthly running, the cost of fuel for vehicle owners will vary.

Tire Change Cost:Average tire life of cars in India is around 40,000 Kms. We have assumed that all 4 tires have to be changed at the end of tire life. Depending upon the monthly running, each vehicle may require a few or no tire changes. Each tire change will come with a cost and this cost has been calculated for a period of five years.

Service Cost: Every automobile will require a regular maintenance and the expense for this maintenance varies depending upon the brand, kilometers run and age of the vehicle. This service/ maintenance cost has been calculated for a period of 5 years.

Opportunity Cost:Every vehicle requires an initial investment. This investment may vary from a few lakhs to a few crores. If the same money is invested in a bank, it would’ve fetched a return. This lost return on investment for a period of five years is termed as opportunity cost.

Depreciation:The value of every vehicle goes down from the time of manufacturing throughout the useful life. This decrease in value year on year throughout the useful life of the vehicle is called depreciation.Depreciation of the car over a period of 5 years.