Cost guide · Updated July 2026
Cost per mile calculator: what your car costs to drive
By the CarBudget team · Verified sources at the bottom of the page
To work out your cost per mile, add up everything the car costs in a year — fuel, insurance, road tax, servicing, repairs, MOT and depreciation — and divide by your annual mileage: cost per mile = total annual cost ÷ annual miles. On a full-cost basis a typical UK car runs at roughly 40–70 pence per mile; counting fuel alone it’s usually 12–20 pence per mile. The more you drive, the lower the per-mile figure, because fixed costs are spread over more miles.
Cost per mile is the single fairest way to compare cars and to decide whether a journey is worth driving. It rolls every cost of ownership into one number you can multiply by any distance. The catch is that the answer depends entirely on what you choose to include — so it pays to be clear about that before you crunch the figures.
The cost-per-mile formula
The formula itself couldn’t be simpler:
Cost per mile = total annual running cost ÷ miles driven per year
Multiply by 100 to get pence per mile, the unit most people quote in the UK. The work is all in the top line: total annual running cost. Get that right and the division is trivial.
What to include
There are two honest versions of cost per mile, and it’s important not to mix them up:
- Fuel-only cost per mile — just what you spend at the pump, useful for deciding whether a specific trip is worth it. It’s essentially your fuel price divided by your MPG.
- Total (or “true”) cost per mile — fuel plus insurance, road tax, servicing, repairs, MOT, tyres and depreciation. This is what the car actually costs you to own and run.
The gap between the two is large, and depreciation is usually the reason. It’s invisible month to month but often the single biggest cost — see our car depreciation calculator for how to estimate it. If you leave it out, your cost per mile can look less than half its real value.
Worked example
Take a driver covering 10,000 miles a year with these annual costs:
- Fuel: £1,450
- Insurance: £700
- Road tax: £195
- Servicing, MOT and repairs: £600
- Tyres (spread over their life): £150
- Depreciation: £2,500
Total: £5,595. Divide by 10,000 miles and the true cost is about 56 pence per mile. Strip out depreciation and the running-only figure falls to about 31p; count fuel alone and it’s roughly 15p. Same car, three very different numbers — which is why you should always say which one you mean.
Typical figures
As a rough guide, a full-cost figure for an average UK car lands somewhere around 40–70 pence per mile, with cheap, high-mileage, slow-depreciating cars at the bottom and expensive, low-mileage, fast-depreciating ones well above. For fuel alone, most petrol and diesel cars sit around 12–20 pence per mile, and efficient EVs charged at home can be lower still. HMRC’s approved business mileage rate of 45p per mile (first 10,000 miles) is a handy sanity check: it’s designed to approximate the real cost of running a typical car.
Why cost per mile matters
Per-mile cost cuts through the noise of comparing cars with different prices, economy and reliability. A car that’s cheap to buy but thirsty and quick to depreciate can cost more per mile than a pricier, efficient one that holds its value. It also makes everyday decisions concrete — whether to drive or take the train, whether a longer commute is worth it, whether a second car earns its keep. To fold every cost into one live figure, use the car cost calculator or read how much it costs to run a car in 2026.
The only way to get a truly accurate number is from your own data. Log fuel, tax, insurance, servicing and mileage in CarBudget and it works out your real cost per mile for you, updating as you go.
Sources and methodology
The figures and benchmarks in this guide draw on published UK data:
- HMRC approved mileage allowance payments (45p/25p per mile): gov.uk — mileage allowance rules.
- Running-cost components and typical ranges: motoring associations’ cost-of-motoring analyses (RAC, AA).
- Depreciation as the largest ownership cost: used-car valuation and depreciation studies (cap hpi, iSeeCars).
See your real cost per mile
CarBudget adds up your fuel, tax, insurance and servicing and divides by your mileage automatically — so your cost per mile is a fact, not a guess. Free to use.