Trying to estimate a remote job. Will be putting about 150 miles per day on truck, hauling maxed out loads one way (3/4 ton or so) all highway miles.
Not sure how to charge for truck, or pay my employee for his truck.
One suggestion from a forestry type is $55/day plus $0.45/mile (.028/km) Fuel cost is $4.50/USGal ($1.20/L)
Using 15mpg, fuel is $0.36/mi ($0.225/km) (Yes I’m in Canada but can convert)
Hoping someone has experience in how to price this, and will share. Thanks in advance.
Edited 8/9/2007 1:57 pm by GOLDENBOY
Replies
cost of truck, maint, repairs, fuel, time, depreciation.....
divide by miles....
Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming
WOW!!! What a Ride!
Forget the primal scream, just ROAR!!!
True, but looking for a more practical way. I think your method only works once you retire the truck. Otherwise you need to be able to predict repairs, depreciation, maintenance, etc.
you have maintainence at scheduled intervals... (get that from the owners manual) and those cost are relatively easy to figure out...
you should know what yur fuel costs are... (based on mileage)
you should already know yur insurance costs... (check yur payment book)
how long do yur tires last and what are their replacement costs...
you must have been driving long enough to figure out rough guesstimates as to what gives up the ghost ant what it take to replace or repair...
Google yur vehicle and get a history on it and it's reliability...
besides you should be already tracking this information...
Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming<!----><!----><!---->
WOW!!! What a Ride!Forget the primal scream, just ROAR!!!
Yes, I do track all my expenses, but this is historical and of course in estimating we are trying to predict the future.
Also, some costs are yearly,i.e. insurance, licence, some are per mile, fuel tires repairs.
Should I differentiate?
Anyway I'll try puttoing some figures together and get back to you.
We get reimbursed $0.44/mile when we use our vehicles for business trips. That's supposed to cover all the operating expenses, but not the cost of buying the vehicle. If this is a unique job for you, you could charge half a buck per mile for operating, and let the cost of purchase come out of general overhead like it should for all you jobs.
"Put your creed in your deed." Emerson
"When asked if you can do something, tell'em "Why certainly I can", then get busy and find a way to do it." T. Roosevelt
Ed,Are you sure the $.44/mile isn't supposed to cover depreciation? Unless you're driving an F650 or a Hummer, you should be able to cover all expenses with that rate.And if you were not covered by their reimbursement rate, shouldn't you be complaining?
Jon Blakemore RappahannockINC.com Fredericksburg, VA
Fuel is easy - get him a gas (only) card and have the itemized bill sent to you. Hopefully you'd qualify for some type of fleet discount.
Other expenses -
Multiply 150 mile/day x 5 days/week x 4.33 weeks / mo = 3250 miles / month
Take monthly expenses like truck payment, insurance, etc. and divide by that number. This is reimbursible cost for each item.
Registration / Safety Inspections cost is a little more difficult since the job won't last a full year (presumably) - I'll assume 2 months. Take his historical average mileage per month for the months this job won't affect his truck and multiply (Lets say 900 miles / month x 10 months = 9000 miles). Take the monthly mileage calc from above and add it for the duration of this job - 2 months, so a total of 6500 miles. Take his total registration cost and divide by 15,500 miles (9000+6500). That is the amount he is entitled to for that expense per mile driven.
Regular maintenance is paid by dividing cost of item x maintenance interval, so an oil change would be something like 29.95 divided by 3000 miles.
Pay him regular hourly pay from the time you leave your shop or whatever meeting place you want to use since I'm assuming some sort of carpooling or convoy arrangement.
I attached a basic estimating spreadsheet sample for this type of thing.
Thanks for the info. I'll have to try the calculations. Still quite a bit of guesswork (trying to predict the future). Also employee owns the truck, so no truck payment, but would have to include depreciation I guess.
G-B,I liked Boliers SS so much, I massaged it andf mad a calculator out of it. Fill in the pale pink Cells with your own descriptions and values, and read the answers in the bright yellow Cells.SamT
Still wondering what to do if no monthly payment?? Use depreciation and maybe an item reflecting the interest he would get on the money he has tied up?
I'm no accountant!
we now charge a $1 a mileperiod
Frankly I agree with IMERC. The Federal rates that I hear some people quoting are only relevant on a tax form. It costs me about $1.40 a mile to own the truck. It is what it is.
Now while owning that truck, and its fuel and insurance etc are already a part of day to day overhead, if for some reason I were to get interested enough to take on a job that required me to drive an hour, two hours, whatever, then I'd charge for that. While I might not charge $1.40 a mile, I'd at least charge something that made me feel better about the offset.
The only example I can think of is a farmer I did an addition for. That was kind of give an take. It was about 40 miles, we did 30 bucks a day and I fueled up off his pump.
Real trucks dont have sparkplugs
So I just did the math and with insurance®istration, fuel, maintenance,repairs,depreciation I'm at $0.71/km or $1.14/mile.
This is strictly last years figures divided my 19000km.
My employee and I agreed on $0.75/km, so I feel this is a good price.
When I was doing the estimate, I came up with $2471 for 17 days driving 215km, 133mi. I could probably buy the truck with that, but would not want the repair bills. He is facing replacing tranny asap, or breaking down and then towing and replacing.
I was also concerned that $0.75 was gouging my client, but i think this is not the case after doing the calculations.
It is also reassuring to know your cost, as mine seems reasonable. Your truck is probably nicer than mine.
Thanks.
every job I did / do was / is a drive to get to....
some times only an hour or so ... often several.... that is because of the geographics here... often it's difficult to get there from here...
I did charge $3.07 per mile and a flat rate for me per hour of road time... last year I was in the black by $1,100 for the truck (truck charges only) when all was said and done.......
now with the fuel cost having gone up it's $3.31....
there's no art to figuring out the expenses that will come up in the future... based on the mileage I drive a year and I know what the truck will need in oil changes, tires, trannies, rear ends, brakes, suspension, alignment or even a motor... not to mention factoring in insurance and what the cost of the truck it's self is...Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming<!----><!----><!---->
WOW!!! What a Ride!Forget the primal scream, just ROAR!!!
How many miles did you drive last year?If it cost $3.31 and you drove 12,000 miles, you're saying that it would cost you $39,720? This seems extremely high to me.We have a 2004 F250 4wd with the FX4 package. I plan that we will put 25,000 miles a year on it and the cost I have budgeted is $13,653. This is a cost of ~$.54/mile.
Jon Blakemore RappahannockINC.com Fredericksburg, VA
everthing factored in concerning the truck including the payments and replacement cost...
F450 w/350 cab.....Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming<!----><!----><!---->
WOW!!! What a Ride!Forget the primal scream, just ROAR!!!
"everthing factored in concerning the truck including the payments and replacement cost...
F450 w/350 cab....."
So the client is paying for your current truck and the one that you will replace it with. ;-)
that's the plan.....
do nothing for free or out of pocket...Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming<!----><!----><!---->
WOW!!! What a Ride!Forget the primal scream, just ROAR!!!
I'm thinking PHM is right. How can you include a monthly payment and replacement cost? (I mean justify it to clients) Of course if you can get awaywith it, go for it.
I know what a F450 is, but with 350 cab?
Thought I would share some specifics, hoping for input from the gang, so here goes:
amorazation kind of thing....
after the payments have all been made continue making the payments to yurself... put that money aside and then those extra payments get applied to the next truck... this is where the need for the additional monies come from...
you left out a long list of items in that spread sheet of yours... very long list...
yur giving away the store IMO.....
I'm using a 450 frame because the truck is weighing in at over 6 tons CGW....
a 350 frame couldn't even begin to deal with it...
the 350 cab was swapped for the 450 cab because I wanted an extended cab... 2 door is too small and 4 door is too big... also doing this gave me a 109" box with a 60gallon behind the cab and before the bed reseve fuel tank...
2 door would have been a 120" box and no tank unless I put in the bed and a 4 door would have been a 96" box and still no tank unless that went into the bed here also... type of cab greatly influences the CA ratio...
come time for a new truck... the mint 450 cab goes back on and the 350 cab gets parted out or off to the scrap yard...... Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming<!----><!----><!---->
WOW!!! What a Ride!Forget the primal scream, just ROAR!!!
So just how many miles do you drive a year and what are your repair costs?
Jon Blakemore RappahannockINC.com Fredericksburg, VA
that information is not available for public posting....Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming<!----><!----><!---->
WOW!!! What a Ride!Forget the primal scream, just ROAR!!!
Okay, I understand that your specific numbers are confidential, but I would think some examples of the items which I left off the list might not be top secret.
The calculation is very simple, all you need is the historical data from your tax return.Here it is based on my numbers for 2006 tax year. Assume 100% business useVehicle expenses: gas, oil, insurance, maintenance, license, registration, $6200Capital Cost Allowance for 2006: $5000Total kilometers driven: 230006200/23000 = $0.27 per km
5000/23000 = $0.22 per km sub total = $0.49 per kmLabour cost: assume $45/hr average speed 80 kms/hr 45/80 =$0.56 per kmTotal cost =$1.05 per kmMark-up: $1.05 x 1.45 = 1.52 per km (1.52 x 1.65 = $2.51 per mile)Mark
Edited 8/10/2007 11:11 pm ET by webber34
the easy way, well sortta easy anyways, is to gather up all yur reciepts and restructure the operating cost of the vehicle...
if you shelled out money directly connected to the truck after purchase... that's costs...
then sit there and look at the truck and make notes on what you might have spent and don't have the reciept...
add this to the total...
do a sliding scale as to what the intial full cost of the current vehicle (every $$$ spent to get it off the show room floor, everything) include set up time and materials (tool boxes, security, racks, toppers, hitche, special packages and anything else it took to make it a truck to suit the mission...
compare the cost of the last 2 or 3 trucks to the cost the current one... take it back 10 trucks if you can... all the better... you'll see a pattern develope... it'll be easy to graph this information...
do the same for expenses associated to each set of wheels...
this will do several things... it will give you a barometer of things to come and where ya been...
document everything to stand up against several IRS audits and yur good to go...
make a seperate column for the trailer.. same gambit.. only figure in the extra wear and tear on the slave vehicle to include the extra fuel to move it......
oooops... this gives you 2 different rates per mile...
this year I repowered and installed a new tranny with a gear vendor... that was one sizable spike in the operational cost I'll tell ya...
when yur all done.. you may be in for a serious eye opener...
note..
say you keep the truck for 10 years...
you have 3 or 4 years of paper on it...
after the note is paid keep paying those monthlies to yurself.. bank this money towards the replacement truck... if yur lucky come new truck day there will be little or no paper to deal with.. but then you get to restructure the cost per mile rates all over again...
with this deal in essence the clients are paying the overhead or at least a portion of it...
30 years I was trucking up for around 6 to 8K a truck...
20 years ago it was about 18K..
10 years ago it was 42K...
this year it's over 60K... Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming<!----><!----><!---->
WOW!!! What a Ride!Forget the primal scream, just ROAR!!!
$3.31/mile is extremely IMO. Around here, if that charge was hidden from the customer's view, and just worked into the contract price, that might fly. Or if the customer was naive or uninterested in the contract's details.
But if that amount was spelled out, it wouldn't pass by any one with a little business savvy. That's way more than I see anyone charge for a pick-up or van. Dump trucks and other specialty vehicles may command more, but I usually see those billed with usage charges, not milage charges.John Svenson, builder, remodeler, NE Ohio
Where in the wilderness are you? Do you often drive several hours each way to jobs? Seems like a lot of driving. I would be thinking of camping or something before I spent 4 hrs driving to and from the jobsite. Or maybe you are hauling materials as well? You must be very organized if you are that far from the store.
Very interesting discussion! Everything from $3.31/mile to $0.425! Wow. And I thought I was comfused.
central colorado...
note what that money covers...Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming<!----><!----><!---->
WOW!!! What a Ride!Forget the primal scream, just ROAR!!!
I would use the current IRS rate of $.485/mile.
Jon Blakemore
RappahannockINC.com Fredericksburg, VA