How to Calculate Your Car's Cost Per Mile

Most people know what they pay for gas. Far fewer know what their car costs per mile once insurance, repairs, tires, registration and parking are counted. That's the number that tells you whether a delivery shift is worth it, what to charge a client for driving, or whether keeping an older car is really cheaper than replacing it.

Want the quick version? Our free vehicle cost calculator does this math as you type, no sign-up needed.

Step 1: Pick a period

Use at least three months, and a full year if you can. Insurance, registration and tires come in lumps; a single month can make your cost per mile look much higher or lower than it really is.

Step 2: Add up the running costs

These are the costs that grow with how much you drive, plus the fixed bills you pay to keep the car on the road:

• Fuel (or charging)
• Oil changes and scheduled maintenance
• Repairs
• Tires
• Insurance
• Registration, inspection and license fees
• Parking, tolls and car washes
• Loan interest or lease payments, if you want the full picture

What about depreciation?

Depreciation, the value your car loses each year, is often the biggest cost of owning a newer car, but you don't pay it at the pump. Two versions of the number are both useful:

• Cash cost per mile: what actually leaves your bank account. Good for budgeting and for gig-work decisions.
• Full cost per mile: cash costs plus depreciation. Good for comparing cars or deciding when to sell. A rough way to estimate depreciation is to look up what your car is worth today and what the same car one year older sells for, and take the difference.

Step 3: Find the miles driven

Subtract the odometer reading at the start of the period from the reading at the end. This is why it pays to log the odometer whenever you fill up or get service.

A worked example

Here's one year for a commuter car (illustrative numbers, not an average):

Odometer: 58,200 at the start of the year, 70,900 at the end, so 12,700 miles. Cost per mile: $5,140 ÷ 12,700 = 40.5 cents a mile, before depreciation.

How to use the number

• Gig and delivery work: subtract your cost per mile × miles driven from what a shift paid. That's what you actually earned. (Read about the mileage deduction for gig drivers too.)
• Pricing jobs: if you drive to customers, build your real cost per mile into trip or service-area fees.
• Comparing with the IRS rate: the IRS standard mileage rate is meant to cover the average full cost of a car. If your real cost is much higher, it may be worth looking at the actual-expense method with your tax preparer.
• Keep or replace: track it year over year. When repairs push an older car's cost per mile above what a newer car would cost with depreciation included, it's time to shop.

Track it automatically

Milebook works out cost per mile for each vehicle from everything you log: fuel, expenses and service. It shows it on each car's page and in reports for any date range, so you can compare this year with last year or one van against another. See how it works as a car expense tracker.