cost per mile Calculator — United States 2025
Track the real cost of every mile you drive.
Calculate US vehicle running cost per mile using gas, insurance, repairs, tires, depreciation, and IRS mileage-rate comparison for work travel.
United States Vehicle Cost Per Mile Notes
US vehicle costs often depend on gas price, annual mileage, insurance premiums, repairs, tire wear, and how much depreciation is spread across each mile driven.
This version is tuned to US mileage planning, where real cost per mile can be compared against The IRS mileage rate or an employer reimbursement arrangement.
US setup: this cost per mile is tuned for dollar-denominated scenarios, American payroll and tax references, state-by-state cost differences, and the finance terms people see in lender, employer, or IRS-facing documents.
The page keeps US language in place where it is relevant, including IRS, federal withholding, FICA, 401(k), sales tax, miles, APR, down payment, paycheck, state tax, and USD totals.
Treat the answer as a United States estimate; before acting, compare it with provider disclosures, state rules, federal guidance, lender underwriting, payroll settings, or advice from a qualified professional.
Estimates only. 2025 IRS 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, rego, and depreciation are fixed — they cost the same whether you drive 5,000 mi or 30,000 mi. Fuel and tyres are variable. High-mi drivers have lower cost per mile because fixed costs are spread further.
The IRS rate is set to approximately cover the average car’s running costs. If your actual cost is below 88c/mile, The IRS method is more generous. If above, the logbook method may give a larger deduction for work use.
For new vehicles, depreciation is often the single largest cost component — easily $3,000–$8,000/yr for a typical new car. Excluding it dramatically understates the true cost per mile.
The IRS allows two methods for claiming work-related car expenses. The right choice depends on your business mi percentage and total annual costs.
88c/mile in 2025 for up to 5,000 work mi. Maximum claim $4,400. No logbook needed — just a diary or records showing work trips. Simple but capped.
Claim the business-use percentage of all actual vehicle costs. Must keep a 12-week logbook every 5 years. Better if business % is high and/or mi exceed 5,000.
Switch to Standard mode, enter your business mi percentage, and the calculator shows which method gives a larger deduction for your situation. Generally: logbook wins above ~30% business use at higher total costs.
EVs have dramatically lower fuel costs but higher purchase prices. The per-mi comparison depends heavily on electricity rates, charging habits, and how long you keep the vehicle.
At 18 kWh/100km and 25c/kWh, electricity costs approximately 4.5c/mile. Petrol at 10L/100km and $2.20/L costs approximately 22c/mile. The fuel saving is roughly $2,600/yr at 15,000 mi.
Insurance for EVs is typically 10–20% higher than equivalent petrol cars (higher repair costs). Rego is similar or lower in states with EV concessions. Servicing is approximately 40–50% cheaper (no oil changes, fewer brake jobs).
EVs under the Luxury Car Tax threshold used for work are eligible for FBT exemption when salary packaged through an employer. This can save $5,000–$10,000/yr in after-tax cost for eligible employees.
The biggest levers on cost per mile are fuel efficiency, insurance shopping, and servicing choices.
Each 1L/100km improvement at $2.20/L saves $330/yr at 15,000 mi. Tyre inflation, smooth driving, and avoiding roof racks all improve efficiency 5–15%.
Use a comparison site annually — premiums vary 30–60% between insurers for identical coverage. Increasing your excess, adding a named-driver restriction, or installing a dashcam can reduce premiums significantly.
Fixed costs (insurance, rego) cost the same regardless of mi. Reducing unnecessary driving directly saves on fuel and tyres without changing fixed costs.
Methodology — all cost components and what to include
What to include
True cost per mile includes all fixed and variable costs: fuel, insurance, registration, compulsory third party, tyres, servicing and repairs, parking and tolls, and depreciation. Omitting depreciation (the loss in vehicle value) significantly understates the real cost — for a typical new car depreciating $4,000/yr at 15,000 mi, that alone adds 27c/mile.
Typical cost ranges (2025)
| Vehicle type | Est. cost per mile |
|---|---|
| Small petrol (e.g. Corolla) | 45–55c/mile |
| Mid-size petrol (e.g. Camry) | 55–70c/mile |
| SUV petrol (e.g. RAV4) | 60–80c/mile |
| Electric vehicle (e.g. Tesla M3) | 30–45c/mile |
| Ute / 4WD (e.g. HiLux) | 70–100c/mile |
IRS 88c/mile rate — how to use it and when the logbook method is better
Cents per mile method
The IRS rate for 2025 is 88 cents per mile for work-related car use. The maximum claimable distance is 5,000 mi per year, giving a maximum deduction of $4,400. No logbook is required, but you must be able to demonstrate that the mi were work-related (e.g. a diary of trips).
Logbook method
The logbook method requires you to keep a 12-week logbook recording all trips (business and private) to establish your business use percentage. Once established, that percentage applies for 5 years (if your pattern doesn’t change significantly). You then claim the business % of all actual vehicle costs. This method is better when: business use exceeds ~30% of total mi, total annual costs are high (expensive vehicle), or mi exceed 5,000.
Rate history
| Year | IRS rate |
|---|---|
| 2025 | 88c/mile |
| 2023-24 | 85c/mile |
| 2022-23 | 78c/mile |
| 2021-22 | 72c/mile |
When does an EV become cheaper to run than a petrol car?
Fuel cost per mile
An EV using 18 kWh/100km at 25c/kWh costs approximately 4.5c/mile in fuel. A petrol car using 8L/100km at $2.10/L costs approximately 16.8c/mile. The annual fuel saving at 15,000 mi is approximately $1,845. At 30,000 mi the saving is $3,690/yr.
FBT-exempt novated leasing
EVs under the Luxury Car Tax threshold ($89,332 in 2025) used for work are exempt from Fringe Benefits Tax when acquired via a novated lease. The saving can be $5,000–$15,000 per year depending on income and vehicle cost — effectively allowing purchase with pre-tax salary.
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 IRS cents per mile rate for 2025?
The IRS rate for 2025 is 88 cents per mile for work-related car expenses. The maximum you can claim using this method is 5,000 mi, giving a maximum deduction of $4,400. The rate increased from 85c/mile in 2023-24.
How do I calculate my cost per mile?
Add all annual vehicle costs (fuel, insurance, registration, repairs, tires, parking, tolls, and depreciation if included), then divide by total miles driven. Example: $9,000 total costs ÷ 15,000 mi = 60c/mile. Use the calculator above to break costs down by category.
Should I use The IRS method or logbook method?
The IRS cents-per-mi method is simpler (no logbook required, max 5,000 mi) and is often better for lower business use percentages. The logbook method requires a 12-week logbook but allows you to claim the business percentage of all actual costs — better if your business use is high or your total vehicle costs are above average. This calculator compares both methods when you enter your business use percentage in Standard mode.
What is the average cost per mile for a car in the United States?
The average cost per mile for a typical mid-size petrol car in the United States is approximately 55–70 cents per mi when all costs including depreciation are included. Without depreciation, the figure drops to around 35–50 cents per mi. The IRS sets its rate (88c/mile in 2025) above most real-world averages.
Where these figures come from
Cost-of-living and inflation figures on this page are drawn from the Bureau of Labor Statistics (CPI), the Reserve Bank of the United States (inflation target and monetary policy), and The US Department of Labor (minimum wage).
- Consumer Price Index (CPI) — the BLS — Consumer Price Index.
- Household expenditure & income — the BLS — Household Expenditure Survey.
- Federal Reserve inflation target — Federal Reserve — Inflation.
- IRS mileage guidance — the US Department of Labor — Minimum wages.
- Fuel & energy price data — US Institute of Petroleum / The EIA.
Last checked: April 2026. Rates and thresholds are reviewed against the source of record each November, when annual adjustments for the following tax year are published.