Own Fleet vs Transport Vendor: The Full Cost

This guide is for companies buying transport. Car owners: we run our own fleet and are not adding cars from owners at the moment (why).

Quick answer

The full cost of an own fleet is vehicles (purchase or lease and depreciation), insurance, permits, fitness and PUC, maintenance and tyres, a spare vehicle, driver salaries with leave cover, GPS and reporting, and management time. Compare that total with a vendor quote for the same routes, shifts and backup standard, not with fuel and salaries alone.

Chapter 01

Why do most own-fleet cost comparisons mislead?

Because they count only the visible running costs (fuel and driver salaries) and leave out ownership, compliance, spares and management time.

When a purchase team puts a vendor's monthly quote next to the cost of the company's own vans, the own-fleet figure usually comes from two ledgers: the fuel bill and the drivers' payroll. Everything else sits in other budgets: the vehicle's purchase in the capital budget, insurance in admin, repairs in maintenance, the spare van nobody counts, and the hours a manager spends finding a replacement driver at 5 AM.

A vendor's price includes all of those. So the comparison is not "vendor price versus fuel and salaries" but "vendor price versus every line below".

Fuel and salaries are the part of an own fleet you can see. The rest is spread across five other budgets.What we tell finance teams

Chapter 02

What belongs in a full own-fleet cost?

Twelve lines: vehicles, financing, insurance, permits and papers, maintenance, tyres, fuel, drivers, leave cover, spare vehicle, tracking and records, and management time.

Use this as a checklist; amounts depend on your vehicles and routes.
Cost line	What to count	Often missed?
Vehicles	Purchase price or lease rent, spread over the years you keep them	Yes, sits in capex
Depreciation and resale	Value lost each year, less what you get when you sell	Yes
Financing	Interest on a loan, or the return the money would earn elsewhere	Yes
Insurance	Commercial policy for each vehicle, renewed yearly	Sometimes
Permits and papers	Commercial permit, fitness, PUC, renewals and the time to manage them	Yes
Maintenance and tyres	Servicing, repairs, tyres, batteries	Sometimes
Fuel	Including dead kilometres to the first pickup	No
Drivers	Salaries, overtime, uniforms	No
Leave and absence cover	Relief drivers when a driver is sick or on leave	Yes
Spare vehicle	An extra vehicle for breakdowns, or the cost of having none	Yes
Tracking and records	GPS devices, software, trip records for audits	Yes
Management time	Dispatch, breakdowns, complaints, paperwork	Almost always

Add the lines for one year and divide by twelve. That is the monthly figure to set against a vendor quote.

Chapter 03

How do you read a vendor quote fairly?

Check which pricing model it uses, what the km limit is, what extra km cost, and whether backup vehicles, GPS, reports and GST invoicing are included.

Vendors price shift transport in three ways. We use all three and quote whichever suits your pattern:

Fixed monthly price per vehicle with a km limit: predictable; extra kilometres at the per-km rate (Sedan ₹12, Ertiga ₹13, Innova Crysta ₹18 per km).
Price per trip: counted and billed monthly; suits fixed routes with varying days.
Per km on actuals: billed monthly on the kilometres run; suits changing routes.

Then check what is inside the price. In our contracts the vehicle, driver, fuel, insurance, permits, maintenance, backup vehicle, GPS tracking and a daily trip report are all part of the service; tolls and parking are extra, as on every booking. Rates stay fixed for the agreed term and are revised at renewal. See how to compare shift transport quotes.

Chapter 04

How should you run the comparison?

Fix the service standard first, cost your fleet for a full year, get quotes for the same standard, then test with a pilot route.

Write the service standard. Routes, shifts, vehicle types, backup time and reports you expect. Both sides are costed against it.
Cost your own fleet for twelve months. Use every line in the table above, including depreciation and management time.
Ask vendors for quotes on the same standard. Name the pricing model you want, or ask for two models side by side.
Normalise the numbers. Same months, same kilometres, GST treatment stated, tolls and parking treated the same way.
Run a pilot route. One route or shift for a trial period, with trip reports, so the comparison uses real data.
Decide and review. Choose, then review cost and service monthly against the same standard.

Chapter 05

What should weigh beyond the monthly figure?

Reliability on bad days, compliance risk, flexibility as headcount changes and the time your managers get back.

Two options with the same monthly cost are not equal if one has a backup vehicle at 5 AM and the other does not. Weigh:

Bad-day reliability: what happens on a breakdown, a driver absence or heavy rain. With us a backup car typically reaches a plant shift within about an hour, under a backup plan agreed per location.
Compliance risk: who keeps permits, insurance, fitness and PUC valid, and who answers an auditor.
Flexibility: how quickly vehicles can be added or reduced when a line starts or stops.
Management time: one coordinator on the vendor side instead of your managers dispatching drivers.

Questions for your finance team

Have we counted depreciation and financing, not only running costs?
Who covers drivers on leave today, and what does it cost?
Do we keep a spare vehicle, and what does it cost to keep it idle?
How many manager hours a month go into transport?
Are vendor quotes and our figure on the same GST basis?

Key terms

Cost terms used in this guide

Total cost of ownership (TCO): Every cost of owning and running a vehicle over its life, not only fuel and the driver.
Depreciation: The value a vehicle loses each year; a real cost even when no cash leaves the company.
Fixed monthly price per vehicle: A vendor price for one vehicle for a month with a km limit; extra km at the per-km rate.
Per km on actuals: Billing for the kilometres actually run, totalled monthly.
Utilisation: How much of the day and how many seats a vehicle is actually used.
Dead kilometres: Kilometres run empty, for example from the garage to the first pickup.

In Gujarat

Where we run company transport in Gujarat

Shiv Shakti Tours & Travels runs employee and executive transport from a head office in Ghatlodiya, Ahmedabad and a branch at Hansalpur Circle, Becharaji, next to the SMG (Maruti Suzuki) plant, with some cars and drivers based near Sanand and in Vadodara.

Short answers

Short answers from this guide

Questions

Cost questions finance and purchase teams ask

Is a transport vendor always cheaper than an own fleet?

Not always. It is often cheaper once every ownership cost is counted, but a small, fixed movement with an existing driver can cost less in-house. Compare the full figures.

Do you publish contract prices?

No. Contract prices depend on routes, vehicles, shifts and term, and are quoted per company. Published per-km rates are Sedan ₹12, Ertiga ₹13 and Innova Crysta ₹18.

Does fuel price change the monthly bill?

No. Our rates stay fixed for the agreed contract term and are revised at renewal.

Are tolls and parking included?

Tolls and parking are extra, as on every booking, and shown on the invoice.

Do we pay less if fewer employees travel?

Charges are per vehicle or per trip, not per head, so attendance does not change the bill. Reducing vehicles does.

Is there a discount for long contracts?

Better rates for long contracts or many vehicles can be quoted per company; there is no fixed percentage.

Do you give a GST invoice?

Yes. We are GST registered and send a monthly invoice, which can be split by plant, department or cost centre.

How do we get real numbers before deciding?

Run a pilot route for a trial period and use its trip reports in the comparison.

Next step

Ask for a proposal

Tell us the company, the location and what you need to move. We reply with our vendor documents and a proposal; nothing is sent until you press a button.

Your enquiry

Transport enquiry from a company.

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Car owners: we run our own fleet and are not adding cars from owners at the moment.

Keep reading

Related guides and vendor files

Sources

Where the facts come from

Owner-confirmed company facts (9 October 2026 questionnaires): licence checks, valid RC, insurance, permit, fitness and PUC shown on request, backup car typically within about an hour for a plant shift, GPS portal login, daily trip report, SLA and NDA on request, vendor audits, invoices split by cost centre, utilisation reports on request.
Owner-confirmed 30 October 2026: start date agreed per company, three pricing models quoted per company, rates fixed for the contract term and revised at renewal, driver uniform and ID card, company name on the vehicle, boarding list for every trip.
Terms and conditions: published per-km rates, minimum fares, night charge and waiting terms.

Cite this guide: Vaibhaviba Bhavsinh Solanki, "Own Fleet vs Transport Vendor: The Full Cost", Shiv Shakti Tours & Travels, updated 31 October 2026, https://www.shivshaktitoursandtravels.in/corporate-transport-guides/own-fleet-vs-transport-vendor-cost.html

Own fleet or transport vendor: the full cost, line by line