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Cost of Operation Per Mile/Per Year
Posted by Michael on March 19, 2015 at 10:51 pmYears ago when I was a fractional owner of an airplane we normally determined the cost per hour to operate the aircraft. We had a dry rate and wet rate. Dry indicated the cost of operation without fuel and obviously wet iw with fuel. In our calculations we had built in the following examples, yearly insurance, hanger fees, reserve for the annual, (yearly inspeciton of the aircraft which is called the “annual”, a reserve for 3,000 hour engine rebuild, reserves for upgrading instruments, radios, and emergency repairs. We knew how much fuel was burned per hour and that was included. So, when we flew the aircraft we paid into the treasury the wet hourly rate and when the annual was needed or the radio broke we had the money in the account to play for the repair. The first hour of flight on January 1 was always the most expensive hour and as it flew the cost to the group was less and less. The more you used it the more cost effective it was.
In that vain, has anyone ever figured out the cost per mile to operate a Coach over a yearly basis. Figuring out like an airplane the first mile of driving January 1st would be the most expensive mile and then the last mile Dec 31 would be the least expensive. With the fixed costs, insurance, Coach shelter, tire wear, reserve for repairs, the more you drive the lower cost per mile to operate. Is there an average cost per mile to operate a Prevost?Are we talking $2 per mile, or $5 dollars per mile? Or something in between.
Thanks Michael
Archived replied 11 years, 6 months ago 6 Members · 13 Replies -
13 Replies
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I am not sure it is possible to get a “per mile” cost. Most of us do not drive enough miles a year to make the cost of fuel and lube the biggest expense.
Things like tires, batteries, insurance, storage, A/V upgrades, reapirs to worn out parts ( heaters that leak, Aqua Hot controllers, etc) will cost the same over time regardless of miles driven. Some things like batteries and tires can be planned for and so much a year set aside to cover them when due. About $1500 a year for 6 years would be close just for tires and batteries. It is very easy to spend another $1500 a year on small things that pop up, led lights, upgrades to interior bits an pieces. Add insurance and you are easily at 5K per year already. Also a huge differnece in cost if you provide the labor or pay some one to do the work. I have had the same bus for 10.5 years and would say my dry cost is between 5 and 8K per year. I do most of the labor myself.
Wet cost would be fuel used, anuual lube and filter changes. Woud you then include campground / resort cost per night. It is very easy to spend more on an expensive resort then the fuel it cost to get there.
All that being said, some years my total cost is less then 5K, other years it easily goes over 10K. Some things like a front end rebuild of an IFS bus would probably only be done once in the life time of a RV bus and that runs about 6K if I am remebering correctly.
Bottom line, drive 2000 miles a year and cost per mile is very high. Drive 50000 miles a year like Peter and cost per mile would most likely look pretty good. Maybe Peter has that number to share.
I suspect some PC members keep better records then I do and can provide more precise numbers.
One area you did not ask about and is priceless is ” Smiles per Mile” . The more miles you drive a Prevost, the more you smile and the happier you are.
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You really need a cot per mile and a cost per unit time – maybe a month. As an example, things on the house side break down from use even when sitting at a campground. This includes tires which never wear out. They time out.
When I owned airplanes I didn’t live in them on the ground. They were put into a hanger awaiting the next flight. I used my airplanes frequently. This is very different then my use of the motorhome.
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To develop any cost analysis on a coach an owner first has to establish a list of all maintenance anticipated.
It is simple to come up with a list of the typical events such as oil change which is based on miles, or Transynd change which is based on years. Then repairs we know will take place have to be listed and a scheduled life has to be determined. I have arbitrarily established life limits for air bags, valves, batteries, brake chambers, etc.
Then there has to be a number created and assigned for the unknown, such as an alternator replacement, or a charge air cooler, neither of which have anticipated life limits. That value for the unknow is nothing more than a guess.
Some expenses are calculated based on miles or age. Tires are a good example. We can wear the tread off them if we drive enough, or they will have to be replaced because of their age. That also applies to some things like the interior decor which some owners like to refresh after the passage of time. Good luck anticipating those values because like unexpected repairs it is hard to get a true value.
The fixed costs are easy. Insurance, storage, registration, and utilities can be determined.
Fuel is easy to calculate in terms of amount per mile, but the cost of fuel is nothing more than a guess. Who would have anticipated the current lower prices?
My coaches have been used in the pursuit of business so for me annual costs had to be calculated after the fact. In my earlier years it cost as little as $6,000 annually based on 12,000 or so miles and $.63 diesel. More recently I have spent as much as $22,000 miles annually for similar miles.
The elephant in the room which nobody ever wants to talk abouit is depreciation. In case nobody has noticed, let me tell you that no expenses short of gross unusal costs such as a new engine will begin to approach the cost of depreciation. The newer the coach, the greater the depreciation and it makes all other costs of operation seem like chump change. If the coach was financed I suspect the interest expense is similarly breathtaking.
Owning a Prevost ain’t for sissies.
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Real men have a Gulfstream or a yacht!
Seriously, as otheda have said, you’ve got your annual costs such as storage’ insurance and basic maintenance, your amortised costs such as tires and suspension parts etc. Fuel for the year based on the current approx. Cost/gall and the number of miles you forecast doing in that year. Add on a guestimate annual amount (put to one side) for unforeseen maint, write off the initial cost of the bus (the elephant) and you might not be far off. If you then sell the bus further down the road for a few dollars, then that’s the icing on the cake.
Thats how I will look at it. Buy it for the enjoyment, (smiles per mile) work out some basic annual costs for budgeting and don’t think about what you may or may not get back when you sell.
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Thank you all for your insight, I appreciate your thoughts, helps me a lot.
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A motor home, any motor home is a depreciating asset. The newer the coach, the worse the hit.
I have always found it interesting how some owners respond to expenses. When fuel was approaching or exceeding $50 per gallon some owners said they were cutting back their use of the coach in response to the cost of fuel. I have heard owners say they would defer some expenses such as tires or batteries because their cost had gone up so much.
Yet some of the owners saying those things owned coaches that were depreciating at over $100,000 per year, but were more concerned their fuel costs or tires had jumped a thousand or two a year.
If you can afford it, own it, use it, enjoy it, and recognize the costs of operation except on older coaches is very small relative to depreciation.
All things considered there is no way anyone can justify owning a late model Prevost. But that is the whole point. If we can afford it who cares? Sometimes we have to stop worrying about practical considerations and just enjoy what we have earned.
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Just for grins I tried to come up with a cost per mile based on 12,000 miles per year. It includes amortization of things like tires, batteries, air bags, etc. based on what I think is their useful life. Keep in mind I do all my own repair work so my costs are just for parts.
$1.30 per mile. Your mileage may vary.
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That darn depreciation thing also shows it’s ugly head every now and then.
Think about the convenience of most all the components lasting a good 5 years before you have to even look at it. Only regular maintenance (for the most part) over a fairly long period of time. There is a bit of enjoyment in that even though there is a price associated with it.
We don’t have to worry about Norgrens, plumbing, tires, electronics, hoses, belts, tires, etc., for quite sometime. Just turn the key and go.
Mark
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Actually I think Mark is being conservative. Except for tires and batteries (chassis and generator) I don’t think he has any real issues other than a potential unusual failure to eventhink about maintenance other than fluid changes and lube for about 10 years
At that point he will likely have a lot of trouble free miles on the coach, and even then he probably could defer some stuff like air bags or Norgrens if he isn’t having the leans.
But if he wants to continue with a trouble free coach he can do a complete refreshing of the underside for not a lot of money relatively speaking and be back into near new condition. The key however is he has to insure whoever services his coach is very detail oriented and deals with all the little things that if ignored get into serious problems such as air system maintenance. I think it is much better, and maybe cheaper to be proactive with respect to maintenance, rather than responsive.
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This like everyone else that may approach this, it is not a perfect scenario, but will give you a basic idea. Let’s 1st assume you have started this equation out with a coach in excellent working order, and let’s assume you have brand new michelin tires and lifeline batteries (your welcome Tom) and any questionable item that is needing replace or repaired has been done, and any engine, tranny and generator maintenance was just done, and that the brakes are 60-80 percent. So let’s just say the coach is zero’ed out and all is great. Let’s assume that tires and batteries irregardless of condition will be replaced at 5 years, and all maintenance will occur exactly when specified in the manual. Let’s also add that you will have repairs, and they are typical, not extreme (new engine, tranny, etc), but more like electronic black water dump valve replaced, new aux compressor, dash ac recharged, etc. this is also use current fuel prices and average mpg.
On 5000k miles per year 1.62 per mile, 8090 per yearOn 12000k miles per year 1.34 per mile, 16055 per yearOn 25000k miles per year 1.23 per mile, 30848 per year -
The number I used before falling fuel prices was $1.50/mile but that number does not consider depreciation and I do my own labor on a major portion of repairs so I’m about in line.
Now let’s see…car at $.40 leaves room for 5-star hotels! Oh, I forgot the incredible food savings I enjoy because I cook all my own PB&J sandwiches and don’t have to eat out!!!!
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I think it is interesting how we seem to all be in general agreement on operating or ownership costs.
Mine is based on my arbitrary decision for useful life of components.
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