cost per hr

[hernando]

anyone ever figure a cost per hr for running your tractor,,,,wear and tear,,insurance ,,,fuel ....all that goes with it..i do custom tractor work and i am trying to come up with a easy way to figure this any ideas ??? thanks for the help....bruce

 

[AndyMA]

The low hour hobby users that make up quite a % of the users of this site will have very different numbers fromt he heavy duty commerical users.

For a commercial user you need to calculate the depreciation per hour of use (cost with equipment/estimated number of hours life) + actual fuel, insurance, routine maintaince costs & an allowance for major repairs which when I use equipment heavily usually equals about $500-1500/year over the long haul.

To this you must add transportation costs and all other misc costs.

Andy

 

[nosliw]

$80/hr. i usually mow is all. people are happy with the price and so am i.

neighbors - no charge.

 

[AndyMA]

$80/hr. i usually mow is all. people are happy with the price and so am i.

neighbors - no charge.

The original poster was asking what it costs to run a tractor, not what people charge. He wants to run it commercially.

Andy

 

[LarryRB]

There are a lot of variables and some set costs,,. For set cost, take the cost of the machine plus yearly insurance,, if financed, for instance, a new 161 at 70K plus 500 a year insurance until paid off,, A 6 year note, means 73K financed divided by 6000 hrs, = 12.50 per hour... Here's the cost of the machine sitting and not working.. Add to it 9.00 per hour fuel, same for oil and grease.. Liability insurance, yearly cost divided by 400 hrs avg yearly use.. Cost of trailer , it's insurance, tags, etc,,, To pay the operator 10 per hour, one must charge 37 per hour to meet SS/fed tax, state tax, unemployment and work comp insurance. If done, accurately, a new 161 will cost in the high 80's per hour just to own... So, 120- 130 per hour is what I would charge.

 

[john_bud]

Larry - sounds very logical and even reasonable. Your insurance charges seem modest for the east coast.

I would have thought that 3 gal / hour was light for that machine (?).




For most of us hobby type users my guess is; the operational costs are probably = 4x the fuel cost. That's 1x for fuel, 1x for oil, grease, filters, 1x socked away to cover major repairs, 1x for insurance ,depreciation and misc. That's maybe high, maybe low but it seems to be a fair starting place.

You'd have to add in costs for truck & trailer to move it. Many customers understand a delivery charge of $50-100 - so that expense can get covered there.

What tractor do you have, what services do you provide and how much is your typical charge? I'm just nosy - PM is you don't want to share in public.

jb

 

[LarryRB]

for my L 48 the insurance is one dollar for every thousand of value. It has dropped to 38K so the inland marine is 380. My figures are very accurate for me, as I spent 18 years as an owner operator monitoring cost per mile,. The 48 has over 600 hours on it and has been flawless to say the least, I burn twice the fuel running my hog mower as I do using hoe or loader,

 

[john_bud]

380 sounds reasonable. What does it cover?
I know what you mean about tracking costs. Owner operators track it like they were paying for it --- oh yeah --- they are! The few that I know are more detail picky than most accountants.

(oops, sorry to hijack the thread...)

jb

 

[diyDave]

I contract for a living, I won't go a half mile down the road for less than $65/hr for a wheel tractor with a 5' bushhog. More $ if ground engaging implements are involved. ASV RC30 rubbertrak loader starts at $75/hr + $ if ground engaging implements are involved (ie: Hyd post hole digger, Harley rake). If I want to lose money, I can stay right here at home and farm it away!

 

[ctpres]

As "hobby" user I just did calc. in head and figure about $10 an hour. I know thats a lot but I can still justify my bota.

 

[LarryRB]

I must have mis interpreted the original question,. I thought he asked "how" does one calculate ownership and not what one charges, I came up with my numbers because the national municipal and construction averages are 6000 hours for a machine. I've worked a highway dept and part time for a large construction company with their JD 710 TLB. Both used the nat'l avg of 6000 hrs when replacing machinery. It is at 6000 that machines start to cost more than they're worth to keep fixing thus the roll over replacement, Taking the hours and dividing the cost of machine, insurance, oil, filter, lube, and fuel, I come out with a number per hour. You add to this number 15% for return on investment, hourly wage, workers comp, unemployment insurance, state and federal taxes to include SS, and you have your number. Others may do this totally different.

 

[john_bud]

LarryRB,

I think you understood the OP's question correctly. And you answered it very well for the construction / utility / muni segment - I learned from your answer (thanks).

jb

 

[Rara Avis]

anyone ever figure a cost per hr for running your tractor,,,,wear and tear,,insurance ,,,fuel ....all that goes with it..i do custom tractor work and i am trying to come up with a easy way to figure this any ideas ??? thanks for the help....bruce

Machinery Cost Calculator - downloadable program
The University of Tennessee - Agricultural Economics

Iowa's approach...
http://www.extension.iastate.edu/Publications/PM710.pdf

Minnesota's approach
http://www.extension.umn.edu/distribution/businessmanagement/DF6696.pdf

 

[Northland]

There are a lot of variables and some set costs,,. For set cost, take the cost of the machine plus yearly insurance,, if financed, for instance, a new 161 at 70K plus 500 a year insurance until paid off,, A 6 year note, means 73K financed divided by 6000 hrs, = 12.50 per hour... Here's the cost of the machine sitting and not working.. Add to it 9.00 per hour fuel, same for oil and grease.. Liability insurance, yearly cost divided by 400 hrs avg yearly use.. Cost of trailer , it's insurance, tags, etc,,, To pay the operator 10 per hour, one must charge 37 per hour to meet SS/fed tax, state tax, unemployment and work comp insurance. If done, accurately, a new 161 will cost in the high 80's per hour just to own... So, 120- 130 per hour is what I would charge.

Is a 161 an excavator?

 

[LarryRB]

yes, the Kubota 161, I'm only using this for a reference when in figuring costs

 

[Aquaman]

Hernando, great question. And thanks to everybody who gave answers. I learned alot from this thread and realized I've been overlooking something that is very important.

 

[Wesdor]

I figure just a bit differently than has been posted. With good care a diesel tractor should be able to run for 2,000 hours without major mechanical problems - more I hope.

I go way overboard on fluid changes and do it yearly whether the hours require it or not.

So here is how I calculate the cost:


Total cost of tractor / 2000 hours. Then the cost of fluid change and then cost of fuel.

Of course this does not include repairs for some bonehead moves that cause damage (don't ask how I know about those kinds of things - smile).

Hope my thoughts help.

 

[AndyMA]

I figure just a bit differently than has been posted. With good care a diesel tractor should be able to run for 2,000 hours without major mechanical problems - more I hope.

I go way overboard on fluid changes and do it yearly whether the hours require it or not.

So here is how I calculate the cost:


Total cost of tractor / 2000 hours. Then the cost of fluid change and then cost of fuel.

Of course this does not include repairs for some bonehead moves that cause damage (don't ask how I know about those kinds of things - smile).

Hope my thoughts help.

In most cases if you are working comercially and not playing around as a hobby you need to work the machine reasonably hard. I fully expect you will not get 2000 hours without some major repair or other. I don't beat my machines, but in my 40 plus years of operating I have broken things upon occasion.

Andy

 

[AchingBack]

My first thought: The longer you own your tractor, if it is a good, low maintenance, reliable one; each year, the costs to own should go lower.

 

[ovrszd]

I run a township road grader. We trade every 4 years which generates 1200-1600 hours on the machine. We pay $40 +- per tach hour to trade. When we add all other expenses it costs us $80 per hour to run the machine.

If we kept the machine longer the trade cost per tach hour would go down. But, there's a fine line here. Currently we have no repair costs. We even trade before the OE tires are worn out. If we kept the machines longer and got ourselves out of warranty we would risk repair costs. This could easily outweigh the per hour trade cost.

With all of this, and the other comments made in this thread, I think it would be a personal equation to determine what it costs you to run your particular piece of equipment. There will be huge variables.

We bought our B2910 for $9900. I expect to put 2000 hours on it without major repair costs. That makes it pretty cheap to own. I guess in a few years I can report my results.