A school bus is the most expensive thing most contractors buy, and it loses value every year it runs. Knowing how much it loses matters well beyond taxes: it's part of what each route really costs you, it shapes your bid prices, and it tells you how much to put aside for the next bus. Some states even pay contractors for buses using a depreciation formula.
Here's a plain guide to a school bus depreciation schedule for budgets and bids. It's not tax advice: your accountant uses the tax rules, which are different.
Straight-line: the simple schedule
Take the price, take off what you expect to sell it for at the end, and spread the rest evenly over the years you expect to run it.
| Example | |
|---|---|
| Purchase price | $140,000 |
| Expected sale price at the end | $10,000 |
| Useful life | 13 years |
| Depreciation per year | ($140,000 − $10,000) ÷ 13 = $10,000 |
| Value after 5 years | $140,000 − 5 × $10,000 = $90,000 |
Tip: Divide the yearly figure by the school days in your contract (often about 180) and you get what the bus costs you each day before fuel, driver and repairs: about $56 a day in the example.
What some states use for contractor buses
- Washington pays districts for contractor-owned buses under a depreciation system: the bus is put in a category, and the state's price for it is divided by that category's lifetime.
- Kentucky sets a share of the state bid price per year for contract buses: 12% in years 1 and 2, 10% in years 3 to 8, and 8% in years 9 and 10.
- Other states and many districts build a payment for the bus into the contract rate instead, often by the bus's age.
Good to know: State formulas, contract terms and tax rules change, and the tax depreciation for your business is set by the IRS and your accountant, not by this kind of schedule. Use your state's current rules and ask your accountant.
Choosing a useful life
- Start from your replacement plan: how many years you really keep a bus.
- Check your contracts for a maximum bus age, which caps it.
- Allow for miles: a bus on long rural routes may wear out sooner.
- Be honest about the sale price: an old diesel bus may sell for only a few thousand dollars.
Using it
- In bids: include each bus's yearly depreciation in your cost per route, or you're giving the bus away.
- In budgets: set the total aside each year toward replacements.
- When selling or trading in: compare the offer with what your schedule says it's worth.
Doing it in FleetCommander
Each bus's record keeps its Purchase date, Purchase price ($) and Current value ($). Update Current value once a year from your schedule. Under Reports, Vehicle age lists every bus with its Year, Age (years), Odometer, Purchased, Purchase price and Current value, and exports as CSV, Excel or PDF to sit next to your budget. The route price calculator has a line for the bus's yearly depreciation or lease, to see what it adds to a route. See the Reports guide.
Ava (Beta), the assistant in the app, answers Bus 101 or Bus 102, which has more miles? or Can I get the vehicle mileage report as a PDF?. More on her page.
Related reading
Questions people ask
- How long is the useful life of a school bus?
- Often 12 to 15 years for a full-size bus, sooner for small buses, depending on miles, roads and your contracts' maximum bus age.
- How do you calculate straight-line depreciation on a bus?
- Take the purchase price, subtract the expected sale price at the end, and divide by the years you expect to run it.
- Do states pay contractors for bus depreciation?
- Some do. Washington pays for contractor-owned buses through a depreciation system, and Kentucky uses a yearly share of the state bid price. Others build it into the contract rate.
- Is this the same as tax depreciation?
- No. Tax depreciation follows IRS rules and is set with your accountant. A straight-line schedule is for budgets, bids and replacement planning.