What Does It Really Cost to Drive a Mile?
The true cost per mile to drive includes fuel, depreciation, insurance, and maintenance. Here's the full calculation, a worked example, and how to cut it.
Most people price driving at the pump. Fuel is usually the smallest of the four big costs, and the gap between the fuel-only number and the true number is what makes commutes, side gigs, and second cars look cheaper than they are.
The four cost buckets
Fuel — the only one you feel weekly. Distance ÷ efficiency × price.
Depreciation — the largest cost for anything under about eight years old, and completely invisible until you sell.
Insurance, tax, and registration — mostly fixed per year, so the per-mile figure falls as you drive more.
Maintenance, tyres, and repairs — genuinely per-mile: oil, brakes, tyres, and the servicing schedule.
Worked example
A three-year-old mid-size sedan, 12,000 miles a year, 32 MPG, fuel at $3.60/gallon:
| Cost | Annual | Per mile |
|---|---|---|
| Fuel (375 gal × $3.60) | $1,350 | $0.113 |
| Depreciation ($22,000 → $17,500) | $4,500 | $0.375 |
| Insurance | $1,450 | $0.121 |
| Maintenance + tyres | $780 | $0.065 |
| Registration and fees | $190 | $0.016 |
| Total | $8,270 | $0.689 |
Sixty-nine cents a mile, and fuel is only 16% of it. A 40-mile round-trip commute costs about $27.50 a day in true terms, versus the $4.50 that shows at the pump.
Marginal vs total cost
The two numbers answer different questions.
Total cost per mile (above) is what the car costs you divided by the miles you drove. Use it when deciding whether to own the car at all, or whether a second vehicle earns its keep.
Marginal cost per mile is what one extra mile costs: fuel plus wear, typically $0.15-0.22 for a normal sedan. Use it for "should I drive or take the train today" and for pricing a delivery gig, since insurance and depreciation are largely already committed.
Confusing the two is how people conclude that gig driving pays well. At $0.69 total and typical reimbursement rates, the margin is much thinner than the fuel-only view suggests.
Cost by efficiency
Fuel component only, at $3.60/gallon:
| Efficiency | Cost per mile | Per 1,000 miles |
|---|---|---|
| 18 MPG (large SUV) | $0.200 | $200 |
| 24 MPG | $0.150 | $150 |
| 32 MPG | $0.113 | $113 |
| 45 MPG (hybrid) | $0.080 | $80 |
| EV at $0.15/kWh, 3.5 mi/kWh | $0.043 | $43 |
Moving from 24 to 45 MPG saves about $840 a year at 12,000 miles. Real, but smaller than the depreciation difference between two vehicles — which is where the money actually is.
Levers that move the number
- Buy at 3-4 years old. The steepest part of the depreciation curve is behind the car, cutting the largest bucket roughly in half.
- Keep it longer. Depreciation per mile falls sharply after year six as the value curve flattens.
- Tyre pressure and steady speed. Underinflation costs 2-3% efficiency; sustained driving above 70 mph costs 10-15% versus 60.
- Shop insurance annually. It is the easiest fixed cost to cut without changing anything you do.
FAQ
How much does it cost to drive 100 miles? About $11-20 in fuel alone for a typical car, or $60-75 once depreciation, insurance, and maintenance are included.
Why is depreciation counted as a driving cost? Because mileage reduces resale value. Two identical cars, one with 30,000 miles and one with 90,000, sell for very different prices — that gap is a real cost you paid by driving.
Is an electric car cheaper per mile? On energy, dramatically — often a quarter of petrol cost. Total cost per mile depends on purchase price and depreciation, which vary far more between EV models than fuel savings do.
Work out the fuel line with the Fuel Cost Calculator, convert between consumption units using the MPG Calculator, and estimate the value curve with the Depreciation Calculator. For a trip-specific breakdown, see how to calculate fuel cost for a trip.
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*Start with the part you can control: the Fuel Cost Calculator.*