What this calculator does
Fuel is the cost people think of and it is rarely the largest one. Adding maintenance, insurance and depreciation to a typical year gives $7,100 against $1,800 of fuel, so fuel is around a quarter of what the car actually costs to run.
Because most of that total is fixed, the cost per mile depends enormously on how far you drive. The same $7,100 works out at $1.42 a mile over 5,000 miles and $0.24 a mile over 30,000. The car did not change, only the divisor. This is why a rarely used car is expensive per trip even when the fuel is cheap.
The formula
The four annual costs are added to give a total, which is divided by the miles driven in the year. The result is a blended figure covering both the costs that vary with distance and the ones that do not. The per-kilometre figure divides by 1.609344, and the 500-mile trip figure is included because a per-mile number is easier to judge at the scale of an actual journey.
| Term | Meaning |
|---|---|
| Fixed costs | Insurance, registration and most of depreciation: incurred whether the car moves or not. |
| Variable costs | Fuel, tyres and wear-related servicing: roughly proportional to distance driven. |
| Depreciation | The value the car loses over the year, usually the single largest line and the easiest to overlook because no money leaves your account. |
The inputs explained
| Field | What to enter |
|---|---|
| Miles driven per year | Miles driven in the year. This is the divisor, and it moves the answer more than any other input. |
| Fuel, per year ($) | Total spent on fuel for the year. |
| Maintenance & repairs, per year ($) | Servicing, tyres, repairs and registration for the year. Average a few years if the last one was unusual. |
| Insurance, per year ($) | Insurance for the year. |
| Depreciation, per year ($) | What the car lost in value over the year. Compare its worth now against a year ago, or take roughly 15 to 20% of current value for a newer car and considerably less for an older one. |
When to use it
Comparing driving against the alternatives
A fair comparison against public transport, a taxi or a hire car needs the all-in figure, not the fuel cost. Fuel alone makes driving look cheaper than it is by a factor of about four in the example here.
Deciding whether a second car earns its keep
A lightly used car carries nearly all the same fixed costs as a heavily used one, so its cost per mile is high. Running the low annual mileage through shows what each trip in it really costs.
Setting or checking a reimbursement rate
Mileage rates are meant to cover the whole cost of running a vehicle, not just fuel. Comparing your own figure against the rate on offer shows whether it is generous or is quietly costing you money.
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
How much does annual mileage change the cost per mile?
The same annual costs divided across a range of yearly mileages.
| Miles per year | Cost per mile | Cost per kilometre | Cost of a 500-mile trip |
|---|---|---|---|
| 5,000 | $1.42 | $0.88 | $710.00 |
| 8,000 | $0.89 | $0.55 | $443.75 |
| 12,000 | $0.59 | $0.37 | $295.83 |
| 20,000 | $0.36 | $0.22 | $177.50 |
| 30,000 | $0.24 | $0.15 | $118.33 |
Questions
Why include depreciation when I have not spent the money?
Because you have. The car is worth less than it was and you will get less for it when you sell, which is a real cost whether or not it showed up on a statement. It is commonly the largest single line, particularly on a newer car, and leaving it out understates the total badly.
How do I estimate depreciation?
Look up what your car sold for a year ago against what it sells for now, using actual listings for the same model, year and rough mileage. Failing that, 15 to 20% of current value is a workable estimate for a car a few years old, falling well below that for an older one, which loses proportionally less.
Should finance interest be included?
If the car is financed, yes, as a separate annual cost added into one of the fields. Interest is money spent to have the car and belongs in the total on the same grounds as insurance.
Is the cost of an extra trip the same as the cost per mile?
No, and this is the main thing to be careful of. The per-mile figure here is an average including fixed costs. One additional trip only adds the variable costs, mostly fuel and a little wear, which is far less. Use the average for deciding whether to own the car, and fuel plus wear for deciding whether to take a particular trip.
For the fuel cost of a single journey in metric units, see the trip fuel cost calculator. For splitting a regular drive between riders, see the carpool cost calculator.