Define Total Cost of Ownership (TCO) in the context of fleet management.

Total Cost of Ownership (TCO) in fleet management is a comprehensive approach that accounts for all costs associated with a vehicle throughout its entire life cycle. This includes not only the initial purchase price but also recurring expenses such as fuel, insurance, maintenance, repairs, and depreciation, among other factors. By considering these various cost elements, fleet managers can make more informed decisions when selecting vehicles, managing budgets, and planning for the long-term financial impacts of their fleet operations.

This holistic understanding of costs enables fleet operators to assess vehicles beyond just the purchase price, allowing for a clearer evaluation of long-term value and operational efficiency. TCO is crucial for optimizing fleet performance and ensuring that all potential expenditures are considered during the decision-making process.