Cost Per Mile to Drive Calculator
Example: Miles driven per year: 12000 mi · Annual depreciation: 3500 $ · Annual insurance: 1600 $ · Annual fuel or energy: 1800 $ · Annual maintenance & repairs: 900 $ · Registration, fees & taxes: 300 $
| True cost per mile | $1 |
| Total annual cost | $8,100 |
| Total monthly cost | $675 |
Worked example
Add up $3,500 depreciation, $1,600 insurance, $1,800 fuel, $900 maintenance, and $300 in fees for $8,100 a year, about $675 a month. Spread over 12,000 miles, that is $0.675 per mile. So a 40-mile round-trip errand really costs about $27, not the couple of dollars of gas most people picture. Federal reimbursement rates land near this figure because they are built the same way.
Frequently asked questions
Why include depreciation if I have not sold the car?
Depreciation is a real cost you pay whether you notice it or not, because the car is worth less each year. Ignoring it makes driving look far cheaper than it is. Estimate it as the drop in resale value over the year, or use a depreciation calculator to fill it in.
How does this compare to the IRS mileage rate?
The IRS standard mileage rate is essentially a national average cost per mile built from the same categories. If your result is close to it, your inputs are reasonable; if it is far off, revisit your depreciation and insurance figures.
Why does driving more lower the cost per mile?
Fixed costs like insurance, registration, and much of depreciation do not rise much with miles, so spreading them over more miles lowers the per-mile figure. This is why high-mileage drivers get more value per fixed dollar, though their fuel and maintenance rise.
Can I use this to price a side gig or delivery job?
Yes. Multiply your cost per mile by the miles a gig requires to see the true cost, then compare it to the pay. Many gigs look profitable until you subtract the full per-mile cost rather than just gas.