Rex says
Money math without the spreadsheet headache. Plug in your numbers and I'll show you exactly where the dollars land.
Try a scenario
Click to load — tweak from there.Inputs
Result
Monthly reserve per unit
$167
Total monthly reserve (fleet)
$500
Annual reserve needed
$2,000
Depreciable amount
$10,000
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How to use this
- 1Enter expected replacement cost ($).
- 2Enter expected trade-in/salvage value ($).
- 3Enter useful life (years).
- 4Enter units owned (fleet count).
- 5Read your monthly reserve per unit on the right — it updates as you type.
- 6Hit Share to keep the scenario or send it to someone.
About this calculator
Mowers, trucks, pressure washers, and vacuum trucks all wear out on a schedule, but many small operators only think about replacement cost the day a machine dies. This calculator spreads the expected replacement cost of a piece of equipment across its useful life, factoring in trade-in/salvage value, so you know exactly how much to set aside monthly to fund the next purchase without a loan or a cash crunch.
Worked example
Using the values the calculator loads with:
Inputs
- Expected replacement cost: 12000 $
- Expected trade-in/salvage value: 2000 $
- Useful life: 5 years
- Units owned (fleet count): 3
Results
- Monthly reserve per unit: $167
- Total monthly reserve (fleet): $500
- Annual reserve needed: $2,000
- Depreciable amount: $10,000
What each field means
Inputs
- Expected replacement cost ($)
- The expected replacement cost used in the calculation, measured in $. Starts at 12000 $ so you have a working example on load.
- Expected trade-in/salvage value ($)
- The expected trade-in/salvage value used in the calculation, measured in $. Starts at 2000 $ so you have a working example on load.
- Useful life (years)
- The useful life used in the calculation, measured in years. Starts at 5 years so you have a working example on load. Accepted range: 1–20 years.
- Units owned (fleet count)
- The units owned (fleet count) used in the calculation. Starts at 3 so you have a working example on load.
Results
- Monthly reserve per unit
- Returned as a money amount in US dollars and shown as the headline result. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Total monthly reserve (fleet)
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Annual reserve needed
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Depreciable amount
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
FAQ
Why not just use accounting depreciation for this?
Tax depreciation schedules (like MACRS) are built to minimize taxable income, not to match actual cash needed for replacement. A truck might be fully depreciated on your tax return in 5 years but still be driven for 8, or it might die at year 6 needing replacement while your books still show book value. This reserve is a cash-planning tool, separate from tax depreciation.
Where should the reserve money actually go?
Into a separate business savings account, not the general operating account. Commingling replacement reserves with operating cash is the most common reason equipment failures turn into emergency loans. Even a basic sub-account or bookkeeping category that isn't touched for payroll or rent keeps the reserve real.
How does financing change this calculation?
If you finance equipment instead of paying cash, the monthly loan payment partially replaces the reserve, but you should still reserve for the down payment on the next unit and for any gap between loan payoff and actual failure. Many operators run both a loan payment and a smaller reserve fund simultaneously to stay ahead of unexpected early failures.
Accuracy and limitations
- Results are estimates before tax, fees, and inflation unless an input explicitly covers them.
- Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.
- This is educational maths, not financial advice. Check anything contractual with the lender or your accountant.
Related tools
Cite this calculator
Writing about this topic? Grab a citation — every link helps keep these tools free.
RevenueLab. (2026). Equipment Replacement Reserve Calculator. Retrieved from https://www.revenuelab.fyi/toolbox/equipment-replacement-reserve
<p>Source: <a href="https://www.revenuelab.fyi/toolbox/equipment-replacement-reserve" target="_blank" rel="noopener">Equipment Replacement Reserve Calculator — RevenueLab</a> (2026).</p>
Source: [Equipment Replacement Reserve Calculator — RevenueLab](https://www.revenuelab.fyi/toolbox/equipment-replacement-reserve) (2026).