Cost Per Mile (CPM) Calculator
Understanding Cost Per Mile (CPM)
Whether you are a professional truck driver, a delivery gig worker, or a daily commuter, knowing your Cost Per Mile (CPM) is essential for financial planning. This metric represents the total expenditure required to move your vehicle across a single mile of road.
How to Calculate Cost Per Mile
The calculation involves summing up all expenses related to a trip or a specific period and dividing that sum by the total miles driven. The formula used by this calculator is:
CPM = (Total Fuel Cost + Maintenance + Fixed Costs + Other Expenses) / Total Miles
Components of Vehicle Expenses
- Variable Costs: These change based on how much you drive. Fuel and tire wear are the primary variable costs.
- Fixed Costs: These stay the same regardless of mileage, such as commercial insurance, permits, and registration fees.
- Fuel Efficiency: Your vehicle's MPG significantly impacts your CPM. Higher MPG directly lowers your operational overhead.
Example Calculation
Imagine you plan a 1,000-mile trip. Your car gets 20 MPG, and gas costs $4.00 per gallon. You expect $100 in tolls and $50 for a quick oil check.
- Fuel Cost: (1,000 / 20) * $4.00 = $200.00
- Total Expenses: $200 (Fuel) + $100 (Tolls) + $50 (Maintenance) = $350.00
- Cost Per Mile: $350 / 1,000 = $0.35 per mile
Why Track CPM?
For business owners and independent contractors, tracking CPM helps in setting competitive rates and identifying where money is being wasted. If your CPM is higher than the industry average, it might be time to look for a more fuel-efficient vehicle or optimize your routes to reduce unnecessary mileage.