The Iceberg of CNC Costs (TCO)
Why the sticker price is only 20-30% of the lifecycle cost. A comprehensive guide to budgeting for machine tools.
Run the Numbers
Don't rely on spreadsheet guesses. Our TCO Calculator accounts for depreciation, energy inflation, and maintenance curves over 5-10 years.
The 5 Pillars of TCO
Total Cost of Ownership (TCO) aggregates all direct and indirect costs associated with an asset over its entire lifecycle. For a CNC machine, this lifecycle is typically 7-10 years in production environments.
1. Acquisition (CapEx)
- • Machine Price
- • Shipping & Rigging ($2k-$10k)
- • Training
- • Initial Tooling Package
2. Operating Energy
- • Spindle Power
- • Compressed Air (Huge cost!)
- • Coolant Pumps
- • Idle Power Draw
3. Maintenance
- • Preventative (Oil/Filters)
- • Unplanned Repairs
- • Spindle Rebuilds (~Every 3-5 yrs)
- • Ball Screw Replacement
The "Hidden" Costs
Software & Licensing
CAM subscriptions, machine options (High Speed Machining, 1000 Block Lookahead), and ERP integration often add $5,000 - $15,000 / year per machine.
Floor Space & Utilities
Rent isn't free. A VMC takes up 100 sq ft, but needs 300 sq ft for maintenance access and chip bins. Factor in HVAC load (machines generate heat).
Consumable Tooling
Often the largest variable cost. Inserts, end mills, drills, and taps. Typically 3-8% of gross revenue produced by the machine.
Budgeting Rules of Thumb
Annual Maintenance Budget
3% - 5%
of Machine Purchase Price
Useful Life (Tax)
7 Years
Standard MACRS Depreciation
See a Real-World Example
We applied this framework to a CMM (Coordinate Measuring Machine) purchase for an aerospace shop.
Read the CMM TCO Case Study →