Machine details

Purchase price (₹)

Resale (salvage) value at end of life (₹)

Useful life (years)

Interest rate on capital (% per year)

Insurance, tax & shelter (% of price per year)

Annual use (hours)

Fuel use (litres per hour)

Diesel price (₹ per litre)

Editable — enter your current local price.

Repairs & maintenance (₹ per year)

Operator wage (₹ per hour)

Hiring rate (with fuel & operator) (₹ per hour)

Results

Ownership cost per hour₹672

Hiring cost per hour₹900

Annual cost — own₹3,36,000

Annual cost — hire₹4,50,000

Owning saves per year₹1,14,000

Fixed cost per year₹1,01,000

· Depreciation₹50,000

· Interest₹40,500

· Insurance & shelter₹10,500

Variable cost per hour₹470

Break-even annual use263 hours

How it's calculated

Depreciation = (price − salvage) ÷ life
Interest = (price + salvage) ÷ 2 × interest rate
Insurance & shelter = price × rate
Variable cost/hour = fuel L/hr × diesel price + maintenance ÷ hours + operator wage
Own cost/hour = fixed cost ÷ annual hours + variable cost/hour
Break-even hours = (fixed cost + maintenance) ÷ (hire rate − fuel & operator cost per hour)

Assumptions

Straight-line depreciation; interest on average investment. Diesel and wage values are editable illustrations, not current prices. Timeliness benefits of owning and availability problems of hiring are not priced in.

Worked example

₹7,00,000 tractor, salvage ₹2,00,000, 10 years, 9% interest, 1.5% insurance, 500 h/yr, 4 L/h at ₹90, ₹25,000 maintenance, ₹60/h operator → fixed ₹1,01,000/yr, variable ₹470/h, own cost ₹672/h vs hire ₹900/h; owning breaks even above about 263 hours a year.

These figures are estimates based only on the values you enter. Actual costs, yields and market prices vary by location, season and practice. This is not financial advice or a guarantee of profit.