A $60,000 service van or excavator feels like a monthly finance payment, but its real cost runs far deeper – commercial insurance, fuel, tires and maintenance, and the depreciation that eats into the asset’s resale value with every mile driven. Add those together, and a single standard service van can cost a trade business over $27,000 a year just to keep on the road. Most estimators never see that number, because vehicle and equipment costs get folded into a flat 15–20% general overhead markup alongside rent and software. This markup quietly gets consumed by fleet costs before it ever funds real business growth.
For a contractor running 10 vehicles, that’s roughly $272,000 a year in pure asset cost that needs to be recovered somewhere. And if it isn’t tracked per job, there’s no way to know whether a given project actually paid for the trucks and equipment it tied up. The fix is treating major vehicles and equipment as direct job costs, not general overhead: calculating a distinct hourly or daily Equipment Recovery Rate for each major asset and line-iteming it on every bid, the same way labor and materials are priced. Skip this step, and a business can look profitable for years right up until its trucks hit 150,000 miles and there’s no cash set aside to replace them.
