Question 1

What is Total Cost of Ownership (TCO)?

Accepted Answer

TCO is the complete cost of owning a vehicle over a period, including purchase price, fuel, insurance, maintenance, registration, and depreciation. It gives a true picture of what a vehicle really costs beyond just the sticker price.

Question 2

How do I calculate vehicle TCO?

Accepted Answer

Add up: Purchase price + (Annual fuel cost × years) + (Annual insurance × years) + (Annual maintenance × years) + Other costs - Resale value. This gives total cost over the ownership period.

Question 3

Which costs more: petrol or diesel vehicle TCO?

Accepted Answer

Diesel vehicles have higher purchase prices but lower fuel costs per km. For high-mileage drivers (20,000+ km/year), diesel often has lower TCO. For low-mileage drivers, petrol is usually cheaper overall.

Question 4

How does depreciation affect TCO?

Accepted Answer

Depreciation is often the largest cost component. New vehicles lose 15-20% value in year 1 and 10-15% annually after. A Rs. 8M vehicle might be worth only Rs. 4M after 5 years - that's Rs. 4M in depreciation cost.

Question 5

What's a good TCO per km for a car?

Accepted Answer

For a mid-range sedan in Sri Lanka: Rs. 25-40/km is typical. Economy cars: Rs. 15-25/km. SUVs and luxury: Rs. 40-60/km. Lower is better, but depends on vehicle type and usage.

Question 6

How can I reduce my vehicle TCO?

Accepted Answer

Buy a 2-3 year old vehicle (avoid first-year depreciation), choose fuel-efficient models, maintain regularly to prevent costly repairs, shop for insurance annually, and keep vehicles longer (7+ years).

Question 7

What is the TCO difference between a hybrid and petrol car in Sri Lanka?

Accepted Answer

A hybrid typically costs Rs. 500K-1M more upfront but saves Rs. 30K-50K/year in fuel. Over 5 years, fuel savings of Rs. 150K-250K offset much of the price premium. Hybrids also have lower depreciation, making TCO comparable or lower over 5+ years.

Question 8

How does vehicle age affect TCO when buying used?

Accepted Answer

A 3-year-old vehicle has already lost 40-50% of value but still has 5-7 years of reliable service. TCO is typically 30-40% lower than buying new. However, vehicles over 7 years may have higher maintenance costs that offset the lower purchase price. The sweet spot is 2-4 years old.

Cost Component	Hybrid (Aqua)	Petrol (Vitz)	SUV (CR-V)
Purchase Price	Rs. 5.5M	Rs. 4.0M	Rs. 8.0M
5-Year Fuel	Rs. 1.35M	Rs. 2.20M	Rs. 2.80M
5-Year Insurance	Rs. 550K	Rs. 400K	Rs. 800K
5-Year Maintenance	Rs. 300K	Rs. 250K	Rs. 450K
Resale Value	-Rs. 3.0M	-Rs. 2.0M	-Rs. 4.0M
Net 5-Year TCO	Rs. 4.7M	Rs. 4.85M	Rs. 8.05M
Cost per km	Rs. 63	Rs. 65	Rs. 107

Total Cost of Ownership

Vehicle & Usage

Annual Costs

Summary

Cost Breakdown

5-Year TCO Comparison by Vehicle Type

Example: 5-year TCO for Rs. 8M vehicle

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Inputs and Assumptions

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