Cost per mile is what your car costs you for each mile of work. It helps you work out what each trip costs before you count what you earn.
What goes into the calculation
Add up what you spend to work with your car and divide by the miles you drive. There are two types of cost:
- Variable: energy, meaning fuel or electricity. It increases with mileage.
- Fixed: maintenance, insurance, loan payment or rent, vehicle taxes and fees, and other costs such as cleaning, phone and tolls. You pay these even when the car is parked.
Count each cost once. If rent already includes insurance, don't count it again. Energy doesn't go in “Other” either: fuel economy and price already account for it.
The calculation, step by step
- Energy per mile: the price per gallon divided by fuel economy in mpg. With 30 mpg and US$3.40 per gallon: 3.40 ÷ 30 ≈ US$0.113333 per mile.
- Monthly fixed costs: add maintenance, insurance, loan payment or rent, and other costs. Divide a yearly cost, such as vehicle taxes, by 12 before adding it.
- Monthly miles: workdays per week, times miles per day, times 52, divided by 12.
- Full cost per mile: energy per mile plus monthly fixed costs divided by monthly miles.
An example
Five days a week, 125 miles a day, with 30 mpg and fuel at US$3.40 per gallon. Each month, US$60 for maintenance, US$150 for insurance and US$40 for other costs, with a car you own and no loan payments.
Monthly miles: 5 × 125 × 52 ÷ 12 ≈ 2,708.33 miles.
| Cost | Type | Per month | Per mile |
|---|---|---|---|
| Energy | Variable | US$306.94 | US$0.113333 |
| Maintenance | Fixed | US$60.00 | US$0.022154 |
| Insurance | Fixed | US$150.00 | US$0.055385 |
| Other | Fixed | US$40.00 | US$0.014769 |
| Total | US$556.94 | US$0.205641 |
Example figures. The per mile column uses six decimal places.
Fixed costs add up to 60 + 150 + 40 = US$250.00 per month. Weekly energy costs are US$70.83 and fixed costs are US$57.69; the total is US$128.53. Monthly costs are US$556.94.
The calculations use unrounded values, including monthly miles. The calculator rounds money to six decimal places, then to two. It shows US$0.21 per mile: US$0.11 for energy and US$0.10 for fixed costs. The fixed part shown is the total minus energy, so the displayed parts add up. Weekly and monthly costs are also calculated before rounding; adding rounded parts can differ from the total by US$0.01.
What changes the result
The more miles you drive each month, the less fixed costs weigh on each mile. With fewer miles, each mile costs more. The result changes when you change your schedule, car or contract.
If you rent the car, enter rent instead of a loan payment. If you have a loan payment, include it in full. If you also use the car for yourself, the result is higher because fixed costs are divided only by work miles.
If you work in kilometers, use km per day and matching consumption units. For L/100 km, energy per km is consumption divided by 100, times the price per liter; for km/L, divide the price per liter by consumption.
How to use it
Compare an offer with what it costs you: multiply cost per mile by the trip's miles, including the drive to the passenger. A 10-mile trip plus 2 miles to pickup at US$0.21 per mile costs 12 × 0.21 = US$2.52.
In the earnings calculator, choose “I know the cost” and enter this number. It's an estimate based on the numbers you entered, so redo the calculation from time to time with your energy price and monthly costs.
General information, not tax or legal advice.
