What does a car really cost per mile?
Most drivers think of fuel as the cost of driving, but for a typical newer car, fuel is often well under a quarter of the total. Depreciation, insurance, maintenance and financing usually cost more, and they are paid whether or not you drive. That is why the cost per mile falls the more you drive, and why a cheap-to-fuel car can still be expensive to own.
Cost per mile formula
Total per year = fuel + insurance + maintenance + registration + depreciation + interest + parking
Cost per mile = total per year ÷ miles per year
Worked example
You drive 12,000 miles a year in a 28 mpg car with gas at $3.25. Fuel costs about $1,392.86. Add $1,800 of insurance, $1,200 of maintenance, $150 of registration, $4,000 of depreciation and $900 of loan interest, and the car costs $9,442.86 a year: about 78.7 cents per mile, or $786.90 a month. Fuel is only 11.6 cents of each mile.
Where to find each number
- Fuel economy: measure it with the gas mileage calculator.
- Depreciation: the value your car loses in a year, from the car depreciation calculator.
- Loan interest: the interest part of this year's payments, from your loan statement or the car loan calculator.
- Maintenance: oil changes, tires, brakes and repairs. Older cars cost more here but lose less value.
How to lower your cost per mile
- Keep the car longer. Depreciation slows every year, so older paid-off cars are often the cheapest per mile.
- Shop your insurance every year or two and consider a higher deductible.
- Refinance an expensive loan with the auto refinance calculator.
- Drive smoothly and check tire pressure to improve fuel economy.
Driving for work? Compare your cost per mile with the IRS rate in the mileage reimbursement calculator.
Frequently asked questions
How do I calculate my car's cost per mile?
Add up everything the car costs in a year, including fuel, insurance, maintenance, registration, depreciation and loan interest, and divide by the miles you drive in a year. $9,443 over 12,000 miles is about 79 cents per mile.
What is the biggest cost of owning a car?
For newer cars it is usually depreciation, followed by insurance and fuel. For older paid-off cars, maintenance and repairs become a larger share.
Does driving more lower the cost per mile?
Yes. Fixed costs such as insurance and registration are spread over more miles, so each mile costs less, even though the total yearly cost goes up.
Is the IRS mileage rate the real cost of driving?
It is an average estimate of the full cost of operating a car for business. Your own cost can be higher or lower depending on your car, insurance and how much you drive.
More car calculators
Last updated October 2026.