How do you calculate cost per mile?

Add up what the vehicle costs you in a year (fuel, insurance, registration, maintenance and tires, parking and tolls, loan interest, and depreciation or the lease payment) and divide by the miles you drove that year. $9,800 over 15,000 miles is about 65 cents a mile.

What is a good cost per mile for a car?

One that is lower than what the driving earns you. For a work car, compare it with the rate you are reimbursed: if your cost per mile is below the rate, each business mile leaves something over; if it is above, you are paying part of the business driving yourself.

Does the IRS mileage rate cover my costs?

It depends on your car and how far you drive. The IRS rate is one figure for every vehicle; enter your own costs and the calculator shows the gain or shortfall per mile, and the yearly mileage at which the rate covers your fixed costs too.

Should I count depreciation?

Yes, if you own the car. Depreciation is a real cost even though you do not pay it monthly: it is the value the car loses while you drive it. Use the price you paid, a realistic resale value and the years you plan to keep it. If you lease, count the lease payment instead.

How do I lower my cost per mile?

Fixed costs shrink per mile as you drive more, so the main levers are the car itself (a cheaper or more efficient one depreciates and burns less), the insurance quote, and fewer wasted miles: plan routes so visits cluster instead of zigzagging across the territory.

Cost per Mile Calculator

Enter the miles you drive for work and what the car costs you in a year or a month. You get the fixed, variable and total cost per mile, where the money goes, and whether the mileage rate you are paid covers it.

The figures filled in are an example. Replace them with your own.

Your driving

Enter costs per

Miles driven a year

Fuel or charging

Fuel price per gallon ($)

Miles per gallon (mpg)

Owning the vehicle

Purchase price ($)

Expected resale value ($)

Years you will keep it

Loan interest per year ($)

Insurance per year ($)

Registration and fees per year ($)

Other fixed costs per year ($)

Running costs

Maintenance and tires per year ($)

Parking and tolls per year ($)

Your cost per mile

Total cost per mile

$0.65 a mile

Fixed per mile

$0.43

Variable per mile

$0.22

Total for the year

$9,800

15,000 miles a year

Where the money goes

Depreciation (fixed)$0.24 · 37%
Fuel or charging (variable)$0.14 · 21%
Insurance (fixed)$0.12 · 18%
Maintenance and tires (variable)$0.06 · 9%
Loan interest (fixed)$0.06 · 9%
Parking and tolls (variable)$0.02 · 3%
Registration and fees (fixed)$0.01 · 2%

Compare with your mileage rate

Rate you are paid per mile ($)

Your employer's rate, or the IRS rate below. Type 0.76 for 76 cents.

IRS business standard mileage rate, 1 Jul to 31 Dec 2026 (IRS Announcement 2026-11).

The rate pays $0.11 a mile more than the car costs you.

You gain $1,600 over the year.

Reimbursed for the year: $11,400

The rate covers your fixed costs too from 12,038 miles a year.

What you type is not sent to ParrotNotes.

How to calculate cost per mile

Cost per mile = everything the vehicle costs you in a period ÷ the miles you drove in that period. Count fuel, insurance, registration, maintenance and tires, parking and tolls, loan interest, and either depreciation (if you own it) or the lease payment.

The example in the calculator: 15,000 miles a year, fuel at $3.50 a gallon and 25 mpg ($2,100), insurance $1,800, registration $200, depreciation $3,600 (a $32,000 car sold for $14,000 after five years), loan interest $900, maintenance $900, parking and tolls $300. That is $9,800 a year, or about 65 cents a mile.

Fixed and variable costs

Fixed costs come whether you drive or not: insurance, registration, depreciation or the lease, loan interest. Variable costs grow with every mile: fuel or charging, maintenance and tires, parking and tolls.

That split explains why the per-mile figure falls the more you drive. In the example, fixed costs are 43 cents a mile at 15,000 miles, but only about 33 cents at 20,000. Variable costs stay at about 22 cents a mile however far you go.

Your cost per mile vs the mileage rate

Many employers reimburse a rate per mile, often the IRS business standard mileage rate. The calculator starts with the latest one and shows whether it pays more or less than your car costs, per mile and over the period.

It also shows the distance at which the rate covers your fixed costs too: below it, every rate-paid mile still leaves part of the insurance and depreciation unpaid. The IRS rate is one standard figure for every car, so a cheap, efficient car often comes out ahead and an expensive one behind.

To work out what you can claim for a trip or a month, use the Mileage Reimbursement Calculator; to keep the record, the Mileage Log Template.

Depreciation or lease payment

If you own the car, depreciation is usually the biggest single cost: the price you paid minus what you expect to sell it for, spread over the years you keep it. Put the loan interest in its own line, not the whole loan payment, because the principal is already counted in depreciation.

If you lease, the lease payment replaces both depreciation and loan interest. Switch the calculator to "Lease" and enter the payment for the same period as the miles.

Results are estimates from the figures you enter. What you can deduct or claim depends on your employer's policy and the tax rules where you are; this page is not tax advice.

Source (read 8 October 2026):

IRS: Standard mileage rates

The miles are worth it when the visit is.

Every mile on this page ends at a customer. Record the visit in ParrotNotes, or a voice note in the car park right after it, and get the summary and action items on your phone, so each drive ends with something to act on. Free for 100 minutes of recording a month.

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