How to Calculate Your True Vehicle Cost per Job
Depreciation, fuel, and annual fixed costs combined into one rate per mile — most contractors quote travel on fuel alone and leave the bigger cost on the table.
True cost per mile = depreciation (purchase price minus resale, divided by lifetime miles) + fuel ($/gal ÷ MPG) + annual fixed costs (insurance, registration, servicing, tires, and other, divided by miles driven per year). Add a markup, typically 15–25%, to land on the rate you actually charge clients for travel.
How to read the inputs
Vehicle Depreciation
- Purchase price minus expected resale, spread across the miles you expect from the vehicle
Fuel
- $/gal ÷ MPG (or L/100km × $/L in metric) — use a realistic loaded work-vehicle figure, not the window sticker number
Annual Fixed Vehicle Costs
- Insurance, registration, servicing and repairs, tires, and other — summed, then divided by annual distance driven
Charge Rate Markup
- Defaults to 20% on top of true cost — covers wear and tear, finance interest, and load/unload time
Worked example
A $45,000 work truck with a $15,000 expected resale over a 150,000-mile life: depreciation = (45,000 − 15,000) ÷ 150,000 = $0.20/mi. At 18 MPG and $3.50/gal, fuel = 3.50 ÷ 18 = $0.1944/mi. With $6,000/yr in combined insurance, registration, servicing, tires, and other costs driven over 20,000 mi/yr, annual fixed = 6,000 ÷ 20,000 = $0.30/mi. True cost = $0.6944/mi. With the default 20% markup, the recommended charge rate is $0.8333/mi.
Try it with your own vehicle
Enter your vehicle's purchase price to unlock the result — every other field is pre-filled with a typical US work-vehicle value to adjust from.
Full tool breaks true cost into depreciation, fuel, and annual fixed cost lines.
Open the live calculator →Common mistakes
- Quoting travel on fuel cost alone — depreciation is usually the bigger line item, at roughly 35–45% of total operating cost against fuel’s 20–35%
- Using an annual mileage figure that doesn’t match how the vehicle is actually driven — drive less than assumed and the real per-mile fixed cost is higher than the quote, not lower
- Leaving the markup at a flat 20% for every vehicle regardless of how hard it actually works or how often it needs unplanned repairs
- Running one "true cost" for the whole fleet instead of a separate profile per vehicle — purchase price, fuel economy, and annual mileage all vary between trucks
The same fixed-cost-per-unit method applies to grinding equipment — see what concrete grinding really costs per sq ft.
Frequently Asked Questions
What counts as "annual fixed costs"?
Insurance, registration, servicing and repairs, tires, and any other recurring vehicle cost — cleaning, accessories, parking permits. The calculator adds those five together, then divides by the miles or km you actually drive in a year to get a fixed cost per mile.
Why does driving fewer miles increase my cost per mile?
Fixed costs — insurance, registration, servicing, tires, and depreciation spread over the vehicle’s lifetime — don’t shrink just because you drove less. They get spread across fewer miles, which raises the per-mile rate. Drive more in a year and those same fixed costs spread thinner, lowering it.
Is depreciation really a bigger cost than fuel?
Usually, yes. Industry benchmarks put fuel at roughly 20–35% of total vehicle operating cost, with depreciation the single largest line at roughly 35–45%. A lot of contractors price travel on fuel alone and quietly eat the bigger cost.
What markup should I add on top of true cost?
Typically 15–25%. It covers wear and tear beyond routine servicing, finance interest if the vehicle is financed, and the time cost of loading and unloading. The calculator defaults to 20% — adjust it to match how hard the vehicle actually works on your jobs.