The purchase price of a tractor or implement is only part of its real cost — fuel, maintenance, insurance, and depreciation over its working life all factor into what it actually costs you per hour of use. This calculator combines all these elements into a single hourly ownership cost, useful for deciding whether to buy, rent, or hire machinery for a given job.
Depreciation Cost = (Purchase Price − Salvage Value) ÷ Expected Life (Years), converted to an hourly rate using annual usage hours. Total Hourly Cost = (Depreciation + Insurance/Tax) ÷ Annual Hours + Fuel Cost per Hour + Maintenance Cost per Hour.
| Cost Component | Approximate Share |
|---|---|
| Depreciation | 35-40% |
| Fuel | 30-35% |
| Maintenance | 15-20% |
| Insurance & tax | 8-12% |
For a tractor purchased at PKR 2,200,000 with a 12-year expected life, PKR 300,000 salvage value, used 600 hours/year, consuming 4 liters diesel/hour at PKR 280/liter, plus PKR 60,000/year maintenance and PKR 25,000/year insurance/tax: Depreciation = (2,200,000 − 300,000) ÷ 12 = PKR 158,333/year, or ≈ PKR 264/hour. Adding fuel (PKR 1,120/hour), maintenance (PKR 100/hour), and insurance (PKR 42/hour): Total hourly cost ≈ PKR 1,526/hour — a figure worth comparing directly against local custom-hire rates before deciding whether ownership makes financial sense for your annual usage.
This varies by machine and local hire rates, but as a general guide, tractors used fewer than 300-400 hours per year are often cheaper to hire on a custom basis, since fixed depreciation and insurance costs get spread over very few hours, making the effective hourly cost high.
For machinery used moderately (under 800-1,000 hours/year), the fixed cost of depreciation spread across fewer hours often exceeds variable fuel cost — this balance shifts toward fuel dominating total cost only at high annual usage.
A common rule of thumb is 15-25% of original purchase price after 10-12 years of typical use, though this varies with maintenance history, brand reputation, and local resale demand for used agricultural equipment.
Include both — routine servicing (oil changes, filters) is predictable, but budgeting an average annual figure that also accounts for occasional major repairs (based on the machine's age and typical failure patterns) gives a more realistic long-term hourly cost than routine servicing alone.