Critical to the economic viability of dry machining is justifying increased tool costs in terms of productivity and ecological savings achievable through the elimination of metal cutting fluids. The automotive industry is a large-scale commercial manufacturing sector in which emphasis is placed on reducing impact on the environment as well as seeking to reduce costs in manufacturing. This paper presents results for dry drilling fully pearlitic grey cast iron with uncoated and partially filtered arc deposited TiN and TiAlN coated Co-HSS split point twist drills using two methods to distinguish drill failure, namely audible screech and measurement of outer corner wear lands. The latter method proved to be of most relevance in manufacturing because it is more closely related to the industrial practice of on-condition assessment prior to drill resharpening. Using the outer corner wear method, TiN coatings (3.0 μm thickness) achieved a modest increase in drill life of 1.4 times, compared with significant improvements of 2.6 times, achieved from a TiAlN top coating (0.8 μm thickness) on a base coating of TiN (1.2 μm thickness). This is a novel result in that a thin top coating of the expensive TiAlN coating over the much cheaper TiN coating can provide a very cost-effective tool coating combination.