Tree service
Tree Service Equipment Cost Calculator
What a chipper, grinder or bucket truck costs per hour once ownership is counted, and the annual hours at which buying beats renting.
Result
Ownership cost is charged as depreciation plus a finance cost on the money tied up, because that is what the machine costs you per year whether or not it leaves the yard. Operating cost is fuel, wear parts and servicing, and it only accrues while it runs. Splitting them is the point: the fixed half is what makes a lightly used machine expensive per hour, and it is why the rent-or-buy answer depends on your annual hours rather than on the price. Wear parts deserve attention on this kit specifically: chipper knives, grinder teeth and cutting chain are consumed fast under load and are frequently left out of an hourly cost, which is how a machine that looked profitable turns out not to have been.
Get a Free Business AuditHow the calculation works
Ownership cost per year is depreciation over the useful life plus a finance charge on the money tied up, plus insurance and storage. Divided by the hours you actually run the machine, that gives an ownership cost per hour, to which fuel and wear parts are added for the all-in figure. The break-even against renting compares the fixed ownership cost against the gap between a rental rate and your own operating cost.
What moves the number
- Annual hours, which is what spreads the fixed ownership cost.
- Wear parts, which on cutting equipment are a major consumable.
- Resale value, since good kit retains a meaningful share.
- Rental rate locally, which sets the comparison.
Where this one goes wrong
Wear parts are the line that gets understated on this kit specifically. Chipper knives, grinder teeth, chains and hydraulic service are consumed fast under load, and an hourly cost built from depreciation and fuel alone misses a cost that can rival the fuel. On the rent-or-buy question, the answer is almost entirely about annual hours rather than the machine's price, which is why a contractor who grinds stumps twice a month should be renting and one grinding weekly should not.
Before you quote
- Include cutting consumables, which rival fuel on this equipment.
- Use honest annual hours rather than optimistic utilisation.
- Compare against the local rental rate rather than assuming ownership wins.
Questions
About this calculator
Should I buy or rent a chipper?
Compare your annual hours against the break even figure. Below it, renting is cheaper because the fixed ownership cost spreads over too few hours; above it, buying wins and keeps winning. The machine's price matters less to this answer than how often you will actually use it.
Why does the cost per hour change so much with annual hours?
Because ownership is fixed and operating is variable. Depreciation, finance, insurance and storage accrue whether the machine runs or not, so halving your hours nearly doubles the ownership share of each hour while fuel and wear parts stay the same per hour.
Am I recovering equipment cost in my rate?
The margin per billed hour answers it directly. If it is thin or negative, the machine is being carried by the rest of the job rather than paying for itself, and that is worth knowing before buying a second one.
Should I include the operator?
Not here, this is the machine only. Labour is a separate cost and it usually exceeds the equipment cost per hour, so an all in billing rate needs both. Keeping them apart is what lets you see whether the equipment decision itself was sound.
The formula
ownership per year = (price - resale) / life + finance on the average balance + insurance + storage; cost per hour = ownership / annual hours + fuel and maintenance per hour
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How to use this calculator
- Purchase price ($). Enter your own figure; the page starts at $48,000.
- Useful life (years). Enter your own figure; the page starts at 10.
- Resale value at the end (%). Enter your own figure; the page starts at 20%.
- Finance or cost of capital rate (%). Enter your own figure; the page starts at 8%.
- Hours you will run it per year. Enter your own figure; the page starts at 400.
- Fuel per hour ($). Enter your own figure; the page starts at $6.5.
The result updates as you type, so you can try a figure, see what it does to all in cost per hour, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Purchase price | $48,000 |
| Useful life (years) | 10 |
| Resale value at the end | 20% |
| Finance or cost of capital rate | 8% |
| Hours you will run it per year | 400 |
| Fuel per hour | $6.5 |
| Maintenance and wear parts per hour | $9 |
| Insurance and registration per year | $1,400 |
| Storage and yard space per year | $900 |
| Rental rate per day if you hired instead | $425 |
| Hours you get from a rental day | 7 |
| What you bill for this machine per hour | $165 |
What comes out
| Result | Value |
|---|---|
| All in cost per hour main result | $36.61 |
| Ownership cost per hour | $21.11 |
| Operating cost per hour | $15.50 |
| Ownership cost per year | $8,444 |
| Total cost per year | $14,644 |
| Margin per billed hour | $128.39 |
| Renting instead, per hour | $60.71 |
| Annual hours where buying beats renting | 187 |
| Annual contribution at these hours | $51,356 |
At 400 hours a year this machine costs $36.61 an hour, $21.11 of ownership and $15.50 of running. Against 165 billed that is $128.39 an hour and $51,356 a year. Buying beats renting above 187 hours.
How sensitive the answer is
Holding everything else steady and changing only purchase price, this is what happens to all in cost per hour. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Purchase price ($) | All in cost per hour |
|---|---|
| $24,000 | $28.93 |
| $36,000 | $32.77 |
| $48,000 example above | $36.61 |
| $72,000 | $44.29 |
| $96,000 | $51.97 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Purchase price ($)
- A money amount, between 0 and 2000000, starting at $48,000.
- Useful life (years)
- A number, between 1 and 40, starting at 10.
- Resale value at the end (%)
- A percentage, between 0 and 90, starting at 20%.
- Finance or cost of capital rate (%)
- A percentage, between 0 and 40, starting at 8%.
- Hours you will run it per year
- A number, between 1 and 8760, starting at 400.
- Fuel per hour ($)
- A money amount, between 0 and 500, starting at $6.5.
- Maintenance and wear parts per hour ($)
- Knives, teeth, belts, hydraulic service. Cutting tools on this kit are a major consumable.
- Insurance and registration per year ($)
- A money amount, between 0 and 100000, starting at $1,400.
- Storage and yard space per year ($)
- A money amount, between 0 and 100000, starting at $900.
- Rental rate per day if you hired instead ($)
- A money amount, between 0 and 20000, starting at $425.
- Hours you get from a rental day
- A number, between 0 and 24, starting at 7.
- What you bill for this machine per hour ($)
- A money amount, between 0 and 5000, starting at $165.
What the results tell you
| Result | What it is |
|---|---|
| All in cost per hour | The headline result. A money figure. |
| Ownership cost per hour | A money figure. |
| Operating cost per hour | A money figure. |
| Ownership cost per year | A money figure. |
| Total cost per year | A money figure. |
| Margin per billed hour | A money figure. |
| Renting instead, per hour | A money figure. |
| Annual hours where buying beats renting | A number. |
| Annual contribution at these hours | A money figure. |
Keep going
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