Use this Cost Per Mile (CPM) calculator to determine the true operational expense of your vehicle, including fuel, maintenance, and fixed annual costs. Understanding your mileage cost is essential for budgeting, tax deductions, and comparing vehicle ownership expenses.
Mileage Calculator: Cost Per Mile
Mileage Calculator: Cost Per Mile Formula
Fuel Cost Per Year: $$\frac{\text{Annual Miles}}{\text{MPG}} \times \text{Fuel Price}$$
Total Annual Cost: $$\text{Fuel Cost} + \text{Maintenance} + \text{Fixed Costs}$$
Cost Per Mile (CPM):
CPM = (Total Annual Cost) / (Total Annual Miles)
Formula Sources: IRS Standard Rates, AAA Driving Costs Report
Variables Explained
- Total Annual Miles Driven: The total distance your vehicle travels in a year. This is the divisor for all costs.
- Fuel Price (Per Gallon): The current average price you pay for gasoline.
- Vehicle Fuel Efficiency (MPG): The average miles your vehicle travels per gallon of fuel.
- Annual Maintenance & Repairs Cost: Includes routine maintenance (oil changes), tires, and unexpected repairs.
- Annual Fixed Costs: Non-mileage dependent costs like insurance premiums, registration fees, and vehicle depreciation.
Related Calculators
What is Mileage Cost Per Mile?
The Cost Per Mile (CPM) is a crucial metric that quantifies the total expenditure associated with operating a vehicle, broken down into a single mile unit. It accounts for both variable costs (which change based on distance driven, like fuel and maintenance) and fixed costs (which remain constant regardless of mileage, like insurance and annual registration).
For individuals, CPM helps with personal budgeting, especially if driving is a significant expense. For businesses, calculating CPM is vital for setting reimbursement rates for employees using personal vehicles and for claiming tax deductions, ensuring compliance with IRS or local taxation standards. Ignoring fixed costs often leads to a significant underestimation of the vehicle’s true economic impact.
How to Calculate Cost Per Mile (Example)
Let’s use the default values to demonstrate the calculation:
- Determine Fuel Cost: If you drive 15,000 miles at 25 MPG, you use 600 gallons of fuel. At $3.50/gallon, your annual fuel cost is $2,100.
- Calculate Variable Costs: Add the annual maintenance cost ($1,200) to the fuel cost ($2,100). Variable Cost = $3,300.
- Calculate Total Annual Cost: Add the Fixed Costs ($3,000) to the Variable Costs ($3,300). Total Annual Cost = $6,300.
- Solve for CPM: Divide the Total Annual Cost ($6,300) by the Total Annual Miles (15,000). CPM = $0.42.
Frequently Asked Questions (FAQ)
Is the IRS standard mileage rate the same as my personal CPM?
No. The IRS standard rate is a simplified figure designed to cover the average cost of vehicle use for business purposes, including depreciation. Your personal CPM, calculated here, reflects your specific vehicle’s efficiency, local fuel prices, and insurance costs, making it a more accurate figure for your situation.
Why is vehicle depreciation considered a fixed cost?
While depreciation is often correlated with mileage, a large portion of a vehicle’s value loss is time-based (age) and market-based, making it an unavoidable annual fixed expense for budgeting purposes, regardless of how much you drive.
How often should I recalculate my Cost Per Mile?
You should recalculate your CPM annually, or whenever there is a major change in variables, such as a significant shift in gas prices, a major repair (which increases the maintenance average), or a new insurance policy.
Can I use this calculator for electric vehicles (EVs)?
Yes. For an EV, replace “Fuel Price” with your cost per kWh, and replace “MPG” with the vehicle’s efficiency (Miles per kWh). The rest of the maintenance and fixed costs apply similarly.