For many farm families, the need for a 4x4 to pull a trailer, to cross difficult land or simply to negotiate our many potholed roads is obvious. There are many models to choose from but, overall, there is little to separate them when it comes to running costs.

We have looked at the three-year running costs associated with owning a typical 4x4 in 2014. For this exercise, we have taken the example of a Toyota Landcruiser, one of the most popular 4x4s on Irish farms.

The overall figures, irrespective of the make of 4x4 chosen, will be significant at over €40,000 over the typical three years of ownership of the vehicle. The question that needs to be asked is – can your farm sustain these costs and can you do anything to curb them?

The overall ownership costs are broken down into depreciation, fuel, insurance, servicing and road tax. They will vary depending on whether the 4x4 is a commercial version or a seated version.

This choice of vehicle type dictates the buying price of the 4x4. It also dictates the re-sale or trade-in price when you go to change the 4x4. The difference between the price at which you bought the vehicle and what you get on trade-in in three years’ time is called depreciation.

While we cannot accurately predict this figure, we can make a good estimate based on prices being quoted on websites, including the Irish Farmers Journal’s own site www.toplink.ie, where there are always a number of good quality used 4x4s offered for sale.

Depreciation is the highest cost associated with owning a 4x4. That figure will also be affected by the condition of the 4x4 at sale time. So, careful ownership and regular servicing can enhance the re-sale value.

For this exercise we have taken the new 4x4 price at around €55,000 for the Toyota Land Cruiser Business 4x4, which is considered a commercial vehicle and liable for the low €333 annual road tax rate. Similar deals are available for the Land Rover Discovery and the long-wheelbase Mitsubishi Pajero for 2014.

On the 2010 versions of the Land Cruiser you will see a depreciation rate of about 45% over three years, based on current prices. This means that the three-year depreciation cost associated with owning the 4x4 is in the region of €24,750. So, you should get in the region of €30,000 for the vehicle in three years.

The second biggest cost is fuel. Most 4x4s of this size claim a fuel economy figure of 12.4km/litre (35mpg). However, my experience would indicate that this at best would be 10.6km/litre (30mpg). Fuel economy drops significantly when you put a loaded trailer on.

With an average annual use level of 30,000km, which would be typical, if not modest, for many farming families, this converts to a use level of 90,000km over three years. This would result in the use of 2,800 litres of diesel per annum or 8,400 litres over three years. The cost of this diesel at today’s pump prices of €1.42/litre is €11,928.

There is little scope for extra economy here, and this does not factor in the additional fuel running costs associated with towing a trailer full of cattle. The only possible additional savings can be found by not driving around idly with a trailer on tow, even if it’s empty.

If you don’t do a lot of trailer work, then should you consider a smaller SUV 4x4 or a twin-cab pick-up, which will save on the buying price and hence depreciation costs. The smaller SUV will have limited off-road ability, but will still be adequate for herding on land and tackling our potholed roads. Most farmers rarely test the true off-road ability of their 4x4s from my experience.

While commercial 4x4s with two seats may be cheaper to buy, they will still experience similar depreciation levels on a percentage basis. This will mean a depreciation saving of between €2,500 and €3,500 depending on the model chosen over the figures shown here. All other running costs will be the same.

While the twin-cab 4x4 pick-up will be cheaper to buy and can be taxed as a commercial, it will not be much more economical. The savings should be in the depreciation rather than the other aspects of running costs.

The small SUV, of which there are many available, will also be lighter on fuel, with the potential to save up to 15% depending on the model chosen. These SUVs will have lower towing ability, if and when needed.

Before considering a new 4x4 investment, take some time to analyse these costs. They will vary only slightly from model to model, depending on the big depreciation figure.

So, buying with the best deal is important to manage depreciation costs. And so too is taking good care of your 4x4 in order to minimise your three-year ownership costs.