How to Calculate Cost Per Mile for a Car (Formula and Examples)

Updated 2026-11-03

Knowing your car's cost per mile is one of the most useful numbers a driver can have. It tells you what every trip really costs, helps you compare cars, and shows whether a side job that pays by the mile is worth it. This guide explains how to calculate cost per mile for a car, with a simple formula, real examples, and the average from AAA's 2026 Your Driving Costs study.

The cost per mile formula

The formula is short: total yearly cost of owning the car divided by the miles you drive in a year. If your car costs $5,950 a year and you drive 12,000 miles, your cost per mile is about 50 cents. The hard part is not the division. It is making sure you have counted every cost, not just gas.

Step 1: Add up your yearly costs

List every cost of having the car for a year. Depreciation is the value the car loses, which you can estimate by subtracting what you expect to sell it for from what you paid, then dividing by the years you will keep it. Add fuel or charging, insurance, maintenance and repairs, tires, registration and fees, and any loan interest. If you have parking or tolls tied to the car, include those too.

Step 2: Divide by your miles

Take your odometer reading at the start and end of a year, or estimate from your commute and trips. Then divide the total cost by the miles. That is your all-in cost per mile.

A worked example

Here is a made-up example for a six-year-old sedan with no loan. These are illustrations, not AAA figures.

Cost	Per year
Depreciation	$1,200
Fuel (12,000 miles at 30 MPG and $3.50 a gallon)	$1,400
Insurance	$1,800
Maintenance and repairs	$1,300
Registration and fees	$250
Total	$5,950

Divide $5,950 by 12,000 miles and you get about 50 cents per mile. That is $496 a month, or roughly $50 for every 100 miles.

Fuel-only cost per mile

If you only want the cost of fuel per mile, divide the price of a gallon by your MPG. At $3.50 a gallon and 28 MPG, fuel costs about 12.5 cents a mile. That number is useful for deciding between two routes or two cars, but it hides most of the real cost. Our guide on how much it costs to drive 100 miles shows fuel costs for different cars and gas prices.

What the average driver pays

AAA's 2026 Your Driving Costs study found that owning and operating a new vehicle costs an average of $12,863 a year, based on 15,000 miles. Divide that by 15,000 and you get about 86 cents per mile. Depreciation was the biggest piece at about $4,422 a year. Your own number may be lower or higher depending on the age of your car, your insurance, your fuel, and how much you drive.

Fixed costs versus variable costs

Some costs stay the same no matter how much you drive, and others grow with every mile. Fixed costs include insurance, registration, and most of depreciation and loan payments. Variable costs include fuel, tires and most maintenance. This matters because it changes your cost per mile as your mileage changes. Using the example above, with $3,250 in fixed costs and $2,700 in variable costs at 12,000 miles:

Miles per year	Total cost	Cost per mile
8,000	$5,050	About 63 cents
12,000	$5,950	About 50 cents
20,000	$7,750	About 39 cents

The more you drive, the lower the cost per mile, because the fixed costs are spread over more miles. But your total spending still goes up, so a lower cost per mile does not mean you save money by driving more.

How to use your cost per mile

Once you have the number, you can use it in many ways. Compare two cars by working out the cost per mile for each. Decide whether a job that pays by the mile is worth it. Judge whether a long commute is costing more than you thought. Decide whether it is cheaper to drive, fly or take the train for a trip. Many drivers are surprised to learn their cost per mile is much higher than the price of gas alone suggests.

Cost per mile for business use and taxes

If you use your car for business, the IRS lets you deduct vehicle costs using either your actual expenses or a standard mileage rate. The rate is set each year, so check irs.gov for the current figure. Keep a mileage log with dates, destinations and purposes. Tax rules have details and exceptions, so talk to a tax professional about your situation. Our cost per mile number is for planning and does not replace tax advice.

Common mistakes to avoid

The most common mistake is counting only fuel. Another is forgetting depreciation, since it is not a bill you pay. People also leave out tires, registration and repairs, or use a mileage figure that is too low. Be honest with the inputs and the number will be useful. If you are unsure of a figure, use a reasonable estimate and update it when you know more.

Cost per mile by type of vehicle

Different vehicles cost different amounts per mile. Small, efficient cars usually cost the least because they are cheaper to buy, insure and fuel. Trucks and large SUVs cost more on almost every line, from depreciation to tires to gas. Electric cars save on fuel and often on maintenance, but they can cost more to buy and insure. Hybrids usually land between gas cars and EVs. The best way to compare is to run the same calculation for each car you are considering, using the real price, insurance quote and efficiency rating.

How to lower your cost per mile

The biggest levers are the ones you pull when you choose a car. Buying used avoids the steepest depreciation, and a more efficient car saves on fuel every mile. After that, small habits add up. Compare insurance quotes each year, keep tires inflated and rotated, follow the maintenance schedule so small problems stay small, and avoid paying for extras you do not need. Driving smoothly and combining trips also cut fuel and wear. Remember that your cost per mile will always be higher if you barely drive, since fixed costs are spread over fewer miles.

Find your number in a minute

You do not have to do the math by hand. Our car ownership cost calculator takes your price, resale value, mileage, fuel, insurance and upkeep, and shows your cost per mile, per month and per year. To see how a big repair might change your numbers, try the repair vs replace calculator.

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