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% to 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. These are summed, then divided by annual distance driven
Charge Rate Markup
- Defaults to 20% on top of true cost. It 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 loses $30,000 of value, so depreciation = 30,000 ÷ 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, when depreciation is usually the bigger line item, at roughly 35% to 45% of total operating cost against fuel’s 20% to 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, when 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, such as cleaning, accessories, or 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% to 35% of total vehicle operating cost, with depreciation the single largest line at roughly 35% to 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% to 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.