GLOSSARY

Life Cycle Cost (LCC)

Life-cycle cost (LCC) is the total cost of owning an asset over its useful life, including design and construction, operation, maintenance, repair, replacement and eventual disposal, usually converted to present value so options can be compared.

TWO DECK OPTIONS OVER 50 YEARS (ILLUSTRATIVE, PRESENT VALUE)OPTION A: LOW FIRST COSTBUILDREPAIRSOPERATIONSTOTAL 195OPTION B: DURABLE DESIGNBUILDREPAIRSOPERATIONSTOTAL 148The cheaper building is the more expensive asset once repairs are counted.
Life-cycle cost adds up first cost, operations, maintenance, repair and replacement over the life of the asset, discounted to today. It often reverses the ranking that first cost alone suggests. Illustrative.

In parking, LCC analysis compares choices that trade higher first cost for lower long-term cost: structural systems and concrete mixes, sealers and membranes, lighting, PARCS platforms and EV charging equipment. Parking structures are exposed to weather, deicing salts and constant traffic, so repair costs over 50 years can rival the original construction cost. See first cost.

Try it
Cheap now, expensive later

Two ways to build the same 400-space garage deck. The durable one costs more on opening day. Set the discount rate and the years in service and compare the total cost in today’s dollars.

A basic deck at $10.0 million needs growing repairs as chlorides reach the steel: about $0.5 million in year 12 rising to $3.0 million by year 50. A durable deck at $10.6 million, with better concrete and a waterproofing membrane, needs smaller repairs later. At a 3% discount rate over 50 years the durable deck is cheaper overall and pulls ahead around year 20.

Illustrative costs for a 400-space structure; repair timing and amounts depend on climate, deicing salts, design and maintenance. A real life-cycle cost analysis uses the owner’s discount rate and a condition-based repair forecast.

What goes into an LCC comparison

  • First cost of design and construction.
  • Routine operations and maintenance. See operating expenses.
  • Periodic repairs and replacements, such as sealers, joints, membranes and equipment. See expansion joints.
  • Energy and software costs over time.
  • A discount rate and study period, which can change the answer and should be stated.

The Parkonomics view

The cheapest garage to build is rarely the cheapest to own. Ask for a life-cycle comparison on any decision that affects durability, and keep the study period long enough to see the repairs.

Related terms: First Cost, Return on Investment, Chloride-Ion Contamination, Spalled, Operating Expenses