In the construction and mining industries, the use of heavy equipment is essential to support productivity and operational efficiency. However, owning and operating heavy machinery involves more than just purchasing the unit. It requires a thorough understanding and management of two key cost components: Owning Cost and Operating Cost. While both are associated with the use of heavy equipment, they differ significantly in terms of function and timing of the expenses incurred.
Owning Cost refers to all expenses associated with the ownership of a heavy equipment unit. These costs are incurred regardless of whether the equipment is actively used in operations. Owning costs include depreciation of the equipment’s value, interest charges if the purchase is financed through credit, insurance premiums to protect against damage or loss, and applicable taxes. These are considered fixed costs and must be accounted for from the early stages of planning and budgeting.
On the other hand, Operating Cost is only incurred when the equipment is in active use. Unlike owning costs, operating costs are variable and depend on how frequently and intensively the equipment is utilized. These expenses include fuel and lubricants, routine maintenance and repairs, spare parts, and operator wages. Because these costs fluctuate with usage, effective monitoring and control are essential to ensure cost efficiency and to prevent them from straining the company’s budget.
Understanding the distinction between owning and operating costs is crucial when it comes to making strategic decisions regarding the purchase, leasing, or overall management of heavy equipment. By accurately calculating both types of costs, companies can design more realistic budgets, set competitive project pricing, and maintain long-term profitability.
MNC Leasing offers flexible and competitive financing solutions for heavy equipment, with a broad network across cities in Indonesia. As your strategic partner, MNC Leasing is committed to supporting your heavy equipment financing needs—helping you manage assets more intelligently, efficiently, and profitably.
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