Cost Per Mile Calculator 2026/27
Track the real cost of every mile you drive.
Work out your UK vehicle's true cost per mile from fuel, insurance, VED road tax, MOT and servicing, tyres and depreciation — then compare it with HMRC's 55p/mile mileage allowance.
How UK cost per mile works
Your real cost per mile depends on fuel economy (mpg), your car's insurance group, VED road tax, MOT and servicing, tyre wear, and how much of the car's depreciation is spread across the miles you drive each year.
This calculator is built for UK drivers. Once you know your true cost per mile, you can compare it against HMRC's Approved Mileage Allowance Payment (AMAP) — 55p a mile for the first 10,000 business miles in 2026/27 and 25p after that — to see whether reimbursement covers your costs, or whether the actual-cost method suits a self-employed driver better.
Figures are in pounds and pence, using British motoring terms: petrol and diesel priced per litre, fuel duty at 52.95p/litre, VED (road tax), MOT, and the pence-per-mile mileage allowance that HMRC and employers use for business travel.
For company cars, running-cost economics differ because you pay Benefit-in-Kind (BIK) tax on the car instead — pure electric cars are taxed at just 4% of list price in 2026/27, which is why salary-sacrifice EV schemes are popular.
Treat the result as an estimate: compare it with real insurance quotes, your logbook mileage, and current GOV.UK guidance on mileage allowances, VED and company-car tax.
Estimates only. 2026/27 HMRC rates.
Select the question that matches your situation.
Your cost per mile is the total annual running cost divided by miles driven. It puts all fixed and variable costs on a per-distance basis so you can compare vehicles, assess work deductions, and understand the true cost of each trip.
Insurance, VED road tax and depreciation are fixed — they cost the same whether you drive 5,000 or 30,000 miles. Fuel and tyres are variable. High-mileage drivers have a lower cost per mile because fixed costs are spread further.
HMRC's mileage allowance (55p/mile for the first 10,000 business miles in 2026/27) is meant to cover the whole running cost of an average private car. If your real cost per mile is below 55p, tax-free reimbursement more than covers you; if it’s above, you’re out of pocket on business trips.
For newer cars, depreciation is often the single largest cost — easily £2,000–£4,000/yr for a mainstream car in its first few years. Excluding it dramatically understates the true cost per mile.
How you claim for business driving in your own car depends on whether you’re an employee or self-employed. HMRC's mileage allowance is the simplest route.
55p per mile for the first 10,000 business miles in 2026/27, then 25p per mile (motorcycles 24p, bicycles 20p). Employers can pay this tax-free. If you’re paid less — or nothing — you claim the shortfall as Mileage Allowance Relief on your tax return.
Sole traders can instead claim the business-use share of real running costs plus capital allowances. Once you pick a method for a vehicle you must stick with it. Better when business use is high and your total costs sit well above the flat rate.
Switch to Standard mode and enter your business-use percentage. The calculator shows the AMAP claim against the actual-cost figure so you can see which is larger for your mileage and total costs.
EVs have far lower fuel costs but higher purchase prices. The per-mile comparison depends on your electricity tariff, charging habits and how long you keep the car.
At around 3.5 miles per kWh and 25p/kWh home electricity, an EV costs roughly 7p/mile to charge. A 45mpg petrol car at £1.35/litre costs about 14p/mile. The fuel saving is around £975/yr at 15,000 miles — more on a cheap overnight EV tariff, less on public rapid chargers.
EV insurance is often 10–20% higher than an equivalent petrol car (pricier repairs). VED is now payable on EVs — £10 in the first year, then the £200 standard rate. Servicing is roughly 30–40% cheaper (no oil changes, less brake wear thanks to regen braking).
A pure-electric company car is taxed on just 4% of its list price as Benefit-in-Kind in 2026/27 (rising to 5% in 2027/28), versus up to 37% for petrol. That’s why salary-sacrifice EV schemes can save higher-rate taxpayers thousands a year.
The biggest levers on cost per mile are fuel efficiency, insurance shopping, and servicing choices.
Improving from 40 to 50 mpg cuts petrol cost from roughly 15p to 12p per mile — about £450/yr at 15,000 miles and £1.35/litre. Correct tyre pressures, smooth driving and removing roof racks all help by 5–15%.
Shop around on a comparison site every renewal — premiums vary 30–60% between insurers for identical cover, and auto-renewal usually costs you. Raising your voluntary excess, adding a named driver or fitting a telematics black box can cut the premium.
Fixed costs (insurance, VED, depreciation) cost the same regardless of distance. Cutting unnecessary trips saves directly on fuel and tyres, and keeping annual mileage low can also protect resale value.
Methodology — all cost components and what to include
What to include
True cost per mile includes every fixed and variable cost: fuel, insurance, VED road tax, breakdown cover, tyres, servicing and repairs (including MOT), parking and tolls, and depreciation. Leaving out depreciation (the loss in the car's value) badly understates the real cost — a car losing £4,000/yr at 15,000 miles adds 27p/mile on its own.
Typical cost ranges (2026/27)
| Vehicle type | Est. cost per mile |
|---|---|
| Small petrol (e.g. Ford Fiesta) | 40–55p/mile |
| Mid-size petrol (e.g. VW Golf) | 50–65p/mile |
| SUV petrol (e.g. Nissan Qashqai) | 55–75p/mile |
| Electric vehicle (e.g. Tesla Model 3) | 35–50p/mile |
| Large diesel / 4x4 (e.g. Land Rover Discovery) | 70–100p/mile |
HMRC 55p/mile allowance — how it works and when the actual-cost method wins
Approved Mileage Allowance Payments (AMAP)
For 2026/27 the HMRC rate for cars and vans is 55p per mile for the first 10,000 business miles in the tax year, then 25p per mile above that. The rate rose to 55p from 6 April 2026, the first increase since 2011/12. Motorcycles are 24p per mile and bicycles 20p. Employers can reimburse business mileage at these rates completely tax-free; if you're paid less, you claim the difference as Mileage Allowance Relief. You can't use AMAP for a company car — only for your own vehicle.
Actual-cost method (self-employed)
Sole traders can instead claim the business-use proportion of their real running costs, plus capital allowances on the vehicle. You must keep records of your business and total mileage. Once you use one method for a vehicle you have to keep it for as long as you own that vehicle. Actual costs tend to win when business use is high and total annual costs are well above the flat allowance (an expensive or thirsty car).
AMAP rate history (cars & vans, first 10,000 miles)
| Tax year | First 10,000 miles |
|---|---|
| 2011/12 – 2025/26 | 45p/mile |
| 2026/27 (from 6 Apr 2026) | 55p/mile |
| Over 10,000 miles (all years) | 25p/mile |
When does an EV become cheaper to run than a petrol car?
Fuel cost per mile
An EV doing about 3.5 miles per kWh at 25p/kWh costs roughly 7p/mile to charge at home. A petrol car returning 45mpg at £1.35/litre costs about 14p/mile. The annual fuel saving at 15,000 miles is around £975 — and far more on a cheap overnight EV tariff (7–9p/kWh), but less if you rely on public rapid chargers at 70–80p/kWh.
Company-car BIK and salary sacrifice
A pure-electric company car is taxed on just 4% of its list price as Benefit-in-Kind in 2026/27 (rising to 5% in 2027/28), compared with up to 37% for a high-emission petrol car. Combined with a salary-sacrifice EV scheme — where you give up gross salary for the car — this can save higher-rate taxpayers several thousand pounds a year versus buying the same car from taxed income.
Practical ways to lower your vehicle running costs
Fuel efficiency improvements
- Keep tyres inflated to recommended pressure (reduces fuel use 2–3%)
- Remove roof racks when not in use (reduce drag, save 5–15% fuel at highway speeds)
- Use cruise control on highways
- Service on schedule — dirty air filter increases fuel use ~10%
- Use the correct fuel grade (premium in a standard engine doesn’t help)
Insurance savings
- Compare quotes annually — switching insurer saves 20–40% in many cases
- Higher excess reduces premium significantly
- Named-driver policies cheaper than open policies for single-driver households
- Dashcam discounts available from some insurers
❓ Frequently askedFrequently asked questions
What is the HMRC mileage allowance (AMAP) for 2026/27?
For 2026/27, HMRC's Approved Mileage Allowance Payment for cars and vans is 55p per mile for the first 10,000 business miles in the tax year and 25p per mile after that. The rate rose to 55p from 6 April 2026, the first increase since 2011/12. Motorcycles are 24p per mile and bicycles 20p. Employers can reimburse at these rates tax-free; if they pay less, you can claim Mileage Allowance Relief on the shortfall.
How do I calculate my cost per mile?
Add all your annual running costs (fuel, insurance, VED road tax, servicing, tyres, breakdown cover, parking, tolls, and depreciation if included), then divide by total miles driven. Example: £6,750 total costs ÷ 15,000 miles = 45p/mile. Use the calculator above to break costs down by category.
Should I claim the HMRC mileage allowance or the actual-cost method?
If you use your own car as an employee, you claim the fixed AMAP rate (55p then 25p) through Mileage Allowance Relief — you can't claim actual costs. Self-employed sole traders can choose HMRC's simplified flat mileage rate or a business-use proportion of actual running costs including capital allowances, but must keep the same method for as long as they own the vehicle. This calculator compares both when you enter your business-use percentage in Standard mode.
What is the average cost per mile for a car in the UK?
A typical mid-size petrol car costs roughly 50–65p per mile once all costs including depreciation are included. Without depreciation the figure drops to around 30–45p per mile. Electric cars are often 35–50p per mile. HMRC's 55p first-tier allowance sits close to the real running cost of an average car.
Where these figures come from
Mileage, tax and duty figures on this page come from GOV.UK / HMRC. Fuel prices vary week to week — check the RAC or AA fuel watch for current pump prices.
- Mileage allowance (AMAP) 55p/25p — GOV.UK — Travel: mileage and fuel rates and allowances.
- Claiming business mileage — GOV.UK — Business travel mileage for employees' own vehicles.
- Company car Benefit-in-Kind — GOV.UK — Tax on company cars.
- Vehicle Excise Duty (road tax) — GOV.UK — Vehicle tax rate tables.
- Fuel duty (52.95p/litre) — GOV.UK — rates and allowances (fuel duty).
Last checked: July 2026. Mileage, VED and company-car rates are reviewed against GOV.UK for each tax year, which in the UK runs 6 April to 5 April.