True cost per mile: $0.36 all-in
Drive 12,000 miles a year at 30 MPG with gas at $3.40, plus $1,800 insurance and $1,200 maintenance: fuel is only $0.11/mile, but the true all-in cost is $0.36/mile — $4,360 a year.
The breakdown
- Fuel per mile: $3.40 ÷ 30 = $0.11
- Fuel per year: $0.11 × 12,000 = $1,360
- Fixed costs: $1,800 + $1,200 = $3,000
- All-in per year: $1,360 + $3,000 = $4,360
- All-in per mile: $4,360 ÷ 12,000 = $0.36
Fuel is the minority
Most drivers anchor on gas price, but fixed costs dominate: here insurance and maintenance are 69% of the total. That's why driving less saves less than people expect — and why the IRS mileage rate exists. Find your number in the car cost per mile calculator.
Frequently asked questions
What is the true cost per mile of driving?
In this example $0.36/mile all-in: $0.11 fuel + $0.25 insurance and maintenance spread over 12,000 miles/year.
Why is cost per mile higher than fuel cost?
Fuel is usually the minority — insurance, maintenance, depreciation, and registration are fixed costs that don't shrink when gas gets cheaper.
How does this compare to the IRS mileage rate?
The IRS standard rate bundles all of this (fuel + fixed costs + depreciation). If your all-in number is well under it, driving for work pays; well over, it costs you.