Use this simple calculator to determine your true **Dollar Cost Per Mileage (DCPM)** of owning a vehicle, factoring in both purchase price depreciation and ongoing operating expenses.
Calculate Dollar Cost Per Mileage to Buy a Car
Dollar Cost Per Mileage (DCPM) Formula
$$\text{DCPM} = \frac{(\text{P} – \text{R}) + \text{C}}{\text{M}}$$
Where: $\text{DCPM}$ is Dollar Cost Per Mileage.
Formula Source: Edmunds Cost to Own Formula Source: Consumer ReportsVariables Explained
- P (Initial Purchase Price): The original cost of the vehicle.
- R (Estimated Resale Value): The expected value of the car when the ownership period ends.
- M (Total Miles Driven): The total distance driven over the ownership period (e.g., 5 years, 60,000 miles).
- C (Total Operating Costs): Sum of all expenses during the period (Fuel, Insurance, Maintenance, Repairs, Taxes, Registration).
Related Calculators
What is Dollar Cost Per Mileage (DCPM)?
The Dollar Cost Per Mileage (DCPM) metric is a crucial financial measurement that reveals the true expense of driving a vehicle for every mile traveled. It aggregates all costs associated with car ownership—both the immediate depreciation (purchase price minus resale value) and the ongoing operational expenses—and divides this total cost by the number of miles driven.
This calculation helps consumers make informed decisions by providing an apples-to-apples comparison between different vehicles, ownership periods, and driving habits. A lower DCPM indicates more cost-efficient ownership. It is an essential component of the Total Cost of Ownership (TCO) analysis and is often used by financial planners to budget for transportation expenses realistically.
How to Calculate DCPM (Example)
- Determine Net Depreciation: Start with the Purchase Price ($30,000) and subtract the Resale Value ($12,000). Net Depreciation = $18,000.
- Calculate Total Ownership Cost: Add the Total Operating Costs ($8,000) to the Net Depreciation ($18,000). Total Cost = $26,000.
- Divide by Total Miles: Divide the Total Cost ($26,000) by the Total Miles Driven (60,000 miles).
- Final DCPM: $26,000 / 60,000 miles = $0.433 per mile.
Frequently Asked Questions (FAQ)
Is DCPM the same as Total Cost of Ownership (TCO)?
No. TCO is the total dollar amount of owning the car over a period, whereas DCPM converts that TCO into a rate (cost per mile). DCPM is TCO divided by the total miles driven.
What factors are included in Total Operating Costs (C)?
The operating costs (C) should include fuel, scheduled maintenance, unexpected repairs, tires, insurance premiums, registration fees, and any annual taxes related to the vehicle.
Why is Resale Value important for DCPM?
Resale value accounts for depreciation, which is often the largest single cost of car ownership. The greater the depreciation, the higher your DCPM will be.
What is a “good” Dollar Cost Per Mileage?
A “good” DCPM varies greatly by vehicle type. Generally, anything under $0.50 per mile for a new car over a five-year period is considered efficient, while luxury vehicles or older cars with high repair costs can easily exceed $1.00 per mile.