Looking Beyond the Price Tag: Understanding the Total Cost of Ownership to Increase Long-Term Profitability

Running a successful construction business involves more than just purchasing equipment. It's about understanding the bigger picture and making informed decisions that drive long-term profitability.

While it can be tempting to go for the machine with the lowest initial purchase price, that strategy does not always pay off over the lifecycle of an asset.

The cost of purchasing a machine is only one aspect to consider when expanding or updating your fleet. An often-overlooked factor is the total cost of ownership (TCO) over the asset’s life.

TCO considers all costs associated with owning and operating equipment, including maintenance, repairs, fuel consumption, and even the expected resale value. By considering TCO, businesses like yours can make smarter financial decisions, improve budgeting accuracy, and maximise their long-term return on investment.

Determining your TCO

While the initial purchase cost of Cat® equipment may be higher than some of our competitors, partnering with WesTrac and Caterpillar® can keep your overall TCO lower, meaning you are better off in the long run and get the added benefit of Cat equipment’s renowned reliability and performance.

Our WesTrac sales experts are equipped to estimate the TCO across a variety of earthmoving, waste and mining applications and can provide an in-depth comparison of ownership costs including operating and maintenance, fuel consumption and the machine life cycle. Thanks to our access to Caterpillar’s global network, we can also compare like-for-like models from other OEMs and give you a comparison.

Following an in-depth consultation, we will be able to assess what machines you need, how often they will be operating and predict required parts purchasing requirements, giving you an overall view of the cost of your machinery beyond its initial purchase.

Keeping costs in check

We understand maintenance and repair expenses can significantly impact the TCO of equipment. That's why we offer proactive maintenance programs and comprehensive service plans through our FitFleet Customer Value Agreements designed to minimise downtime and maximise operational efficiency.

A commitment to preventive maintenance ensures your overall TCO remains low over the long-term, providing greater cost savings and improved equipment performance.

We are also pleased to offer fuel efficiency guarantees when you purchase a qualifying Cat machine with Product Link™ enabled through the Cat Fuel Edge Program

Cat Next Gen Excavators offer up to 25% reduced fuel consumption when compared against previous models. If your Cat Next Gen Excavator isn’t delivering these results, the Cat Fuel Edge Program will kick in and you will be reimbursed with Cat parts credit. 

If you have signed up and agreed to the program terms, WesTrac and Caterpillar will be able to monitor your new machine's fuel consumption via Product Link.

If you burn more than committed to under the fuel consumption threshold, you’ll receive a Cat parts credit automatically for each litre of fuel your machine has consumed above the set threshold. The program highlights our commitment to stand behind the fuel efficiency of the equipment we sell

There are a lot of programs here and sometimes it can be a challenge to wrap your head around. That's why our resident Team Next Gen expert Roberto has some explainers in the video below

Resale value and support

Another crucial aspect of TCO is the residual value of your machines and equipment, which we determine based on how long you intend to keep your machine and provide you an estimated resale value. 

This allows you to make an informed decision regarding your equipment investments and better plan for future upgrades, rebuilds or replacements. Our expertise in assessing residual value ensures you can extract the maximum value from your equipment and mitigate financial risks.

Another factor that can weigh on TCO is access to dealer resources and support capabilities. Partnering with WesTrac gives you the support of one of the largest authorised Cat equipment dealers in the world, with 20 branches throughout Western Australia, New South Wales and the Australian Capital Territory.

In addition to our extensive branch network, you also have access to 24/7 online ordering, a dedicated customer service centre and the nation's biggest Parts Distribution Centre. WesTrac is able to offer you a cost-effective parts and support solution to keep your machines working around the clock.

By considering purchase price, maintenance and repair costs, and anticipating residual value, we empower you to make financially sound decisions and maximise the long-term value of your investments. 

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