The quick answer
The working cost of a truck includes acquisition, financing, insurance, registration, fuel, maintenance, tires, labour and downtime. Build a cash-flow budget using realistic paid days and collected revenue. Keep the monthly finance payment visible, but do not treat it as the whole cost of operating the vehicle.
Separate upfront, fixed and variable cash costs
Upfront costs can include the down payment, inspection, initial repairs, insurance deposits and registration. Fixed costs continue even when the truck is idle; variable costs change with distance, hours or the work performed.
Include driver pay or an owner draw, business overhead and a maintenance reserve. Check that a cost is counted only once. For example, a maintenance package and a separate repair allowance may cover some of the same work.
Calculate the cost per paid day or kilometre
Use realistic paid days after time off, service and expected gaps. Divide annual fixed cash costs by those paid days, then add variable costs for the planned work. Include empty kilometres and non-billable loading or waiting time.
Illustration only: $48,000 of annual fixed cash costs over 200 paid days is $240 per paid day. At an assumed $0.65 per kilometre for variable costs and 500 total kilometres, variable cost is $325, giving $565 before any costs excluded from those assumptions. These figures are arithmetic examples, not Canadian trucking benchmarks or quotes.
Distinguish cash flow from accounting profit
A cash budget tracks the actual down payment, loan or lease payments and operating outflows. An accounting profit calculation can treat interest, depreciation and asset purchases differently. Do not add full debt principal payments and full depreciation together as if they were the same accounting expense.
Ask an accountant to help with tax, depreciation and GST/HST treatment. Eligible input tax credits depend on the business and transaction, so the timing of any recovery should not be assumed without checking.
Test the plan before committing
Run a lower-revenue month, a repair and a delay in customer payment. Check the cash remaining after each scenario. Include a balloon payment or lease purchase option in the period when it falls due.
Update the budget after the truck starts working. Actual fuel use, maintenance and collected revenue are more useful than a forecast that stays unchanged.
Before you take the next step
- Complete purchase and financing schedule
- Insurance and registration estimates
- Paid days, total kilometres and realistic collections
- Fuel, labour, maintenance and tire assumptions
- Working capital for delayed payments and downtime
- Separate cash-flow and accounting views
Frequently asked questions
Should I use revenue per loaded kilometre?
It can help compare work, but include empty kilometres and all paid and unpaid time in the cost calculation. Otherwise, the apparent margin can be overstated.
How much should the maintenance reserve be?
Use the truck’s condition, inspection findings, service schedule, past costs and advice from a qualified repair provider. One percentage will not fit every truck and operation.
Does a lower payment mean lower ownership cost?
Not necessarily. It may come from a longer term or a larger future payment. Compare total financing costs and the operating condition of the vehicle.
This page provides general planning information. Financing availability, approval, rates and terms must be confirmed with the lender. Our enquiry form does not authorize a credit check.
Sources & further reading
Official resources for checking the rules that apply to your equipment and operation. These organizations do not endorse this website.
- Equipment financing: what to prepare — BDC
- Calculating input tax credits — Canada Revenue Agency
- Motor vehicle leasing costs — Canada Revenue Agency