Insurance | Cleaning Fees |
Closing Costs | Consumables e.g. ink for a printer |
Costs To Sell Item When You Are Done With It / End Lease | Initial Costs |
Installments | Interest Expenses Related to Purchase |
Membership Fees | Operational Costs |
Parts | Purchase Cost |
Renovations | Service Fees |
Shipping Fees | Storage |
Support Costs | Upgrades |
Usage Charges | Utilities / Energy Consumption |
Example
If you purchase a car your lifetime cost for the vehicle may include down payment, monthly payments, interest expense, license & registration, parking, gas, service appointments, repairs, maintenance expenses, cleaning expenses, insurance and any costs required to dispose of the vehicle at its end-of-life. If you are comparing this to the cost of an alternative form of transport or lifestyle, all of these costs can be considered. Likewise, if you are comparing two vehicles recurring costs such as gas can have a significant impact on lifetime cost and this can be considered in decision making.Notes
Lifetime costs are often represented as a single number discounted to present value.| Overview: Lifetime Cost | ||
| Type | Business Cost | |
| Definition (1) | The total cost of a product, service or asset over its useful life including the cost to operate, use, maintain and dispose of the item. | |
| Definition (2) | The total cost of a product, service or asset over its useful life including the sum of all recurring payments discounted to their present value. | |
| Example | The lifetime costs of a car lease including down payment, all monthly payments, insurance, fuel, maintenance, parking and returning costs at the end of a lease such as paying for minor damages. | |
| Value | Lifetime costs can be used to compare alternatives such as the cost of owning a car versus living closer to work and walking. | |
| Related Concepts | Total Cost Of Ownership | |
