Find your true cost of driving — including fuel, insurance, tax, depreciation, and maintenance.
Most drivers only consider fuel when calculating their driving costs, but the true cost per mile includes all vehicle running costs spread across your annual mileage. This includes fuel, insurance, road tax, MOT and servicing, tyres, and depreciation — the latter being the single largest cost for most car owners.
For a typical UK driver covering 10,000 miles per year in a mid-range car, the total cost per mile including all expenses is usually between 30p and 60p. At the HMRC approved mileage rate of 45p per mile (for the first 10,000 miles), many employees driving their own vehicle for work are roughly breaking even or slightly ahead on costs.
HMRC allows employees to claim 45p per mile for the first 10,000 business miles driven in their own vehicle each tax year, and 25p per mile thereafter. This is known as the Approved Mileage Allowance Payment (AMAP) rate and is designed to cover the full cost of using a personal vehicle for work, including fuel, wear and tear, insurance, and depreciation.
To calculate your cost per mile, add up all your annual vehicle costs (fuel, insurance, road tax, servicing, depreciation, tyres) and divide by your annual mileage. For example, if your total annual costs are £5,000 and you drive 10,000 miles, your cost per mile is 50p. Our calculator does this automatically and breaks down each cost category.
If you drive in countries that use kilometres, or if your vehicle displays fuel economy in litres per 100km, switching to cost per km may be more useful. To convert: cost per mile ÷ 1.609 = cost per km. Our calculator handles this conversion automatically when you switch to km mode.