Company car TCO in 5 questions

What you need to know about company car TCO 

• TCO measures the total cost of owning and operating a vehicle. 
• It enables you to compare vehicles based on their actual costs and choose the most financially attractive option. 
• To provide an objective comparison, TCO should include as many costs and financial impacts as possible, including taxation. 

What is the Total Cost of Ownership (TCO) of a vehicle? 

The Total Cost of Ownership (TCO) of a vehicle is the calculation of all the costs associated with owning and using a vehicle throughout its entire lifecycle. It therefore goes beyond the purchase price or lease payments alone, taking into account a wide range of financial factors linked to vehicle ownership. TCO can be calculated on either a monthly or an annual basis. 

When choosing a company car, TCO allows you to compare the actual costs of different vehicles, including those that are less immediately visible. A vehicle with an attractive purchase price may ultimately prove more expensive overall than one with a higher initial price. 

Although TCO was originally developed as a tool for fleet managers, it is also highly relevant for self-employed professionals, members of the liberal professions, company directors and small businesses. 

Which costs can be included in the total cost of ownership (TCO) of a company car? 

Fixed or variable, direct or indirect… To provide the most meaningful picture possible, the TCO should take as many cost factors as possible into account, including: 

• Fixed costs, such as the purchase price of the vehicle or lease payments, insurance (third-party liability, comprehensive cover, legal protection and roadside assistance), vehicle registration tax and annual road tax. 
• Fuel or electricity costs. 
• Variable costs, such as maintenance, repairs and tyre replacement. 
• The vehicle’s residual value, in other words, the amount for which you expect to sell it in a few years’ time. 
• Expenses, such as non-recoverable VAT, the CO₂ solidarity contribution and the tax impact of non-deductible expenses. 
• The tax benefit resulting from the depreciation of the vehicle and the tax deductibility of its running costs. 

Company car TCO: why is taxation becoming increasingly important? 

Due to changes in Belgian legislation, particularly the law introducing greener tax and social mobility measures, tax considerations are playing an increasingly important role when assessing the total cost of a vehicle. This is especially true when comparing electric vehicles with vehicles powered by combustion engines. 

Indeed, company cars with combustion engines (with the exception of genuine commercial vehicles) purchased or leased in Belgium from 1 January 2026 onwards are no longer tax-deductible. Choosing a vehicle with a combustion engine also results in higher tax and social costs, including benefit in kind, the CO₂ solidarity contribution and annual road tax. 

How do you calculate company car TCO? 

Calculating the Total Cost of Ownership (TCO) can be complex because it takes many different cost components into account. Some of these are also difficult to predict, such as repair costs or the vehicle’s residual value. 

• If you choose an operational lease, many costs are already included in the monthly rental fee. This makes TCO easier to calculate and removes some of the uncertainty surrounding unexpected repairs and residual value. 
• Many leasing companies also provide TCO calculators or estimated TCO values for their vehicles. Your accountant or tax adviser can also be an invaluable source of advice. 
• Some public authorities also offer online TCO calculators, such as those provided by the Brussels-Capital Region and the Flemish Region. 
• If you decide to calculate TCO yourself, define the assumptions that best reflect your situation and business strategy, including the ownership period, estimated fuel or electricity costs and annual mileage. 
• Don’t overlook hidden costs. If you are a company director, take into account both the impact on your personal income tax (through the benefit in kind) and on your company’s tax position (through tax deductibility and the taxation of non-deductible expenses). 

Is the TCO of an electric vehicle more attractive than that of a vehicle with a combustion engine? 

For comparable models, the TCO of an electric vehicle is now often more attractive than that of a vehicle with a combustion engine, particularly when it comes to company cars. 

Several factors explain this difference: 

• Electricity costs are generally lower than petrol and diesel costs 
• The tax regime, although differences remain between the Regions due to vehicle registration tax and annual road tax
• Less frequent and lower maintenance costs for electric vehicles.