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Hourly cost to operate a 1.5 CY Loader

Discussion in 'Heavy Equipment' started by Lawn Lad, Aug 19, 2003.

  1. Lawn Lad

    Lawn Lad Senior Member
    Messages: 407

    I'm wondering if someone can help with the maintenance and fuel expenses for running a John Deere 344 articulated loader. I'm running the number for grins and giggles to see what it comes out to.

    Let's assume the following:

    Purchase price new: $75,000
    Add Snow pusher: $4,000
    Salvage Value $10,000
    Actual Aquisition Cost: $69,000
    Useful life: 10 years
    Cost per year/winter: $6,900
    Hours per season: 200
    Cost per hour: $34.50

    What this doesn't include is maintenance, fuel, insurance and the operator. What else am I missing. Are my assumptions correct?

    What would be the expected annual maintenance for the machine?

    How much diesel does a fella like this go through in a 5 hour night? Or just per hour?

    Waiting on a quote from my insurance agent, but willing to hear what others might be paying.

    It would only be run during the winter, save about 10 or 15 hours off season. Otherwise, it would be just for pushing snow.
  2. GeoffD

    GeoffD PlowSite.com Veteran
    Messages: 2,266

  3. Lawn Lad

    Lawn Lad Senior Member
    Messages: 407

    Thanks Geoff. That's labor, which is different than the equipment hourly cost for operation.

    A labor cost example being, using $20.00 an hour for example:

    Base wage: $20.00
    Taxes: $2.80 (includes SUTA, FUTA, SS, Medicare, WC = 14%)
    Add health care of other costs per hour
    Total wage = $22.80

    What this doesn't calculate is is any bonus or overtime that is paid. If a guy working 200 hours has 20 hours of overtime during the winter (i.e. possible holiday's or a long storm event), figured hourly, that's another $1.00 per hour to figure into his wage before taxes, or another $.14 in overtime burden. If he does work overtime, figured all together it's $23.94 per hour, or nearly a 20% increase over base pay.

    So ultimately I'll add this labor calculation to my per hour equipment cost to get total cost per hour to run this bad boy.
  4. digger242j

    digger242j Senior Member
    Messages: 672

    A pretty similar question was asked in this thread .

    Of course, they won't give you the information for free, but it looks like they've researched the topic pretty thoroughly. I've never used the service, so I can't tell you how acccurate their numbers are, or what it costs.

    Specific to the numbers you posted, at 200 hours/year for ten years you'll still have a lot of life left in the machine. I'd figure a higher salvage value, or try and find more hours to work it during those ten years.
  5. Lawn Lad

    Lawn Lad Senior Member
    Messages: 407

    Thanks Digger. I remember that thread and checking out the site you posted.

    Because I'm not using the loader for anything but snow and I can figure then that the lighter duty use is going to save on some kinds of maintenance, I'm wondering what the "other" maintenance factors are going to be. I would suspect that over 10 years hoses will get old and need to be replaced, etc.

    So I'm wondering if someone who owns a similar type machine is able to say that annually they go through xx maintenance procedures. How often do you change the hydro fluid/filters? What's involved with the diesel engine? Should I anticipate a thorough review of the equipment after 4 or 5 years at 1,000 hours or so to change out hoses and anything else that time has taken its toll on? How frequently does this need to occur.

    It may very well be from a salvage value point of view I'm very low or that I can get more than 10 years out of it. Actually the dealer told me to expect 20% at 10 years, assuming normal use. But the problem is that 10 year old 344's are rarely on the market since people just hold onto them. So most likely this machine woul be come a yard machine or a back up or secondary unit on a larger property. Who knows. But at least I'll know that I've recovered my money in the given time frame. Should I choose to keep it longer, so be it, all the better if the math works out.
  6. Alan

    Alan PlowSite.com Addict
    Messages: 1,393


    Form my experience with digging equipment I think you're way low on the lifespan of that machine. We've got a Ford TLB at work which is 1986 and still operating reasonably well. I say reasonable only in that the backhoe is the clumsiest thing I've ever been on. As a loader for salt or sand use this thing could go for years yet. I'm not sure on the hourmeter, next time I get near it I'll check.

    Keep in mind that loaders may typically run 40-50 hours per week, giving them over 2,000 hrs.year, and there's a lot of 10 yr old loaders operating in quarries around here. I'll check the hours on the loaders where my son works and see what I come up with. This is in quarry use, which (I think) is more harsh than sand or gravel operations.

    I would expect fuel use to run 2 gal/hr max. in the 344. That's less engine than what is in a 307 Cat excavator and I know that will run right around 2 gal/hr if it's working steady.

    My son just called me back, one of the loaders in the quarry is a 1993 and currently has 20,590 hours and is still in daily, production use. He's going to check the other two and also try to remember what has been done to them in the past three years that he has been around them.

    One thing I didn't see in your cost schedule is the interest on financing. I assume you would finance something that big.
    Last edited: Aug 20, 2003
  7. Lawn Lad

    Lawn Lad Senior Member
    Messages: 407

    Thanks Alan. You're right, I would finance, that's a good point. Kinda forgot about that one. Thanks for the fuel useage number.

    I'm sure I'll get many more hours out of the unit than what I'm costing it at. But if I figured it over 20 years, I'm waiting 20 years to make my money on it. I figure if I can pay for it 10 years or less, than it's worthwhile. Heck, I'll shoot for five years all the better.

    If I assigned a value of $500 or $1,000 per year for maintenance, would that be sufficient with the anticipated work load? Or would it be higher? Obviously the older it gets the more maintenance there is, but let's assume the first 5 to 10 years.
  8. gslam88

    gslam88 Senior Member
    Messages: 168


    Although you are using a 10 year figure for the life of the machine, when you calculate the machine for depreciation for taxes it is 15 years I believe right now.

    I also would not calculate the salvage value now, there is now way to tell what you might sell it for, or how long you have it. Would you pay for a 20 year old loader the same as 4 years from now when you get bigger or want to trade up?

    I also did a quick look online at john Deere's used machines, you can get a 2002 with 1410 hours to a 1998 with 81 hours for the price range of 60-65k

    Also as far as cost per season, an especially in regards to financing it, I would calculate how long of a loan you are taking out on it, probably 6 years say as an example.

    The bank will charge you, based on simple math as I try not to figure out the finance charge, of 65k / 6 years which is about 10,833 per year or 902 on principle alone. I would work on what you have to pay back to make the unit yours because even though your not using it in the summer you still have to pay for it.

    As far as hourly charge for a small payloader check around, but the cost around here is $85 an hour to $125 depending on size

    The other option might be to rent a pay loader for the winter if you do not want to pay that much annually, just make sure that there is a signed contract before hand, how many of us know someone who banked on doing a deal (not signed yet) and it fell thru ... and I know its a catch 22 .. you have to have it to do, but being rent-able can still be having it to some people....

    just my .02

  9. Alan

    Alan PlowSite.com Addict
    Messages: 1,393

    Since you're looking at new, we can assume virtually no repair expense the first year, under warranty.

    Pricey parts are going to be engine, transmission and hydraulic system. Other stuff will be cheap by comparison. Hoses should be good for a thousand hours on a loader. They aren't exposed to the degree of hazards that they are on a backhoe or excavator. If it's kept inside they won't crack like they will if it's out in the sun. Also, storing it inside will keep the cylinders from rusting and tearing out seals. I think they're all chromed pushrods now but somehow they still seem to get rusty if they are not run constantly to keep a film of oil on them.

    Good routine maintenance will help prevent a lot of expensive breakdowns. But "stuff happens" no matter how good you treat the machine. I'm not sure just how much you would need for "average" maintenance costs. I see this as a low time machine, even after 10 years. If you carried $500 per year it should more than cover the normal stuff that dies. But losing an engine or (especially) hydraulic system could burn up that amount in one trip to the shop.
  10. Lawn Lad

    Lawn Lad Senior Member
    Messages: 407

    Thanks Alan and everyone, your answers have helped a lot.
  11. wyldman

    wyldman Member
    Messages: 3,265

    Budget a little extra for repairs and maintenance,as it can be quite expensive.

    All kinds of things can,and will happen in the middle of a storm.Tires tend to get punctured,or a sidewall ripped open,and not only are the tires expensive,neither is the tire guy at 4 am in a snowstorm.
  12. paul

    paul PlowSite.com Veteran
    Messages: 151

    Without knowing what loader you are talking about, check with your loacl dealer on service costs. We change hyd oil, once a year, but filters twice a year (helps to keep mouisture out) oil changes are every 100 hrs, fuel filter in the winter we change them every 20 hrs, do to temp changes and mouisture in the fuel. Since your not going to be using the bucket much, I don't think cutting edges are going to wear out too fast, figure every three years on them. One point I would make is daily maintance, if you don't grease the pivoit pins, loader and bucket pins you are going to have much higher running costs. I use 1/2 hr per day for operator maintance, 3 hrs per month extra maintance, ( onsite service)