# How to Calculate Cost Per Mile: Fleet Formula and Example

To calculate cost per mile, add your fleet's fixed and variable costs for a period and divide by the miles driven. Formula, worked example and inputs.

Source: https://www.highpointgps.com/resources/how-to-calculate-cost-per-mile-for-your-fleet
By Max Karnaukh, VP of Sales, published 2026-08-31, updated 2026-10-13

## What Is the Cost Per Mile Formula?

To calculate cost per mile, divide your fleet's total operating cost by the total miles driven over the same period. Pick a period (a month, a quarter or a year), add up everything it cost to run the fleet during it, then divide by the miles those vehicles drove in that window. The result is one number you can use to price jobs, compare vehicles and spot a truck that is slowly costing more to run than it earns.

A calculated number beats a gut estimate because most of what makes a mile expensive stays invisible until you total it. A fleet that tracks only fuel and driver pay misses a large share of its real per-mile cost, and will consistently underprice work as a result. Doing the full calculation brings out the costs that never show up week to week.

## Which Fixed and Variable Costs Go Into Fleet Cost Per Mile?

Split every cost into two buckets. Fixed costs are the ones you pay whether a truck turns a wheel or not: vehicle payments or depreciation, insurance, licensing and permits, IFTA and IRP registration, ELD and telematics subscriptions, and a share of your yard and back-office overhead. Variable costs scale with miles: fuel, tires, maintenance and repairs, and the labour for the driving itself. Fixed costs get cheaper per mile as they spread across more miles, so utilization has a direct effect on the number. An underused truck carries the same insurance and payment as a busy one, spread over far fewer miles.

Fuel, maintenance and labour are usually the three largest variable lines, and they move the most from month to month. Fuel follows price and driving behaviour, maintenance climbs as a vehicle ages, and labour depends on how efficiently you run routes. Since these three dominate, getting them right matters far more to a credible cost per mile than getting a small overhead allocation exact.

## How Does Telematics Supply the Inputs?

By hand, the hardest part is getting accurate miles and accurate per-vehicle costs, and telematics automates both. A GPS tracking device records the real distance each vehicle drives, so you divide by measured miles instead of odometer estimates or guesses. Engine-hour and fault data feed the maintenance side, fuel-card integration and engine fuel data feed the fuel side, and geofence and trip data show how much each vehicle is used, which decides how thinly its fixed costs get spread.

The bigger gain is calculating cost per mile for each vehicle instead of one blended fleet average. A blended average hides your best and worst trucks inside the same number. Per-vehicle data shows which unit has crossed the point where its maintenance and downtime cost more than replacing it would, and it lets you price a job against the vehicle that will run it instead of a fleet-wide guess.

## A Worked Cost Per Mile Example for One Truck

One regional straight truck over one year, with illustrative figures. Every fleet's numbers differ, so use it to see the shape of the calculation. The telematics and ELD line is left blank because plans are quoted fleet by fleet; add your own figure. The same formula works in kilometres: divide by kilometres driven to get cost per kilometre.

| Cost line | Type | Annual |
| --- | --- | --- |
| Truck payment or depreciation | Fixed | $18,000 |
| Insurance | Fixed | $9,000 |
| Licensing, IRP, IFTA, permits | Fixed | $2,500 |
| Telematics and ELD plan | Fixed | Not shown: ask for a quote |
| Share of yard and office overhead | Fixed | $6,000 |
| Fuel | Variable | $38,000 |
| Maintenance, tires and repairs | Variable | $11,000 |
| Driver wages and benefits | Variable | $72,000 |
| Total |  | $156,500 (telematics not included) |
| Miles driven (from the GPS tracking device) |  | 78,000 |
| Cost per mile |  | $2.01 |

## FAQ

### What costs should be included in cost per mile?

Include both fixed and variable costs. Fixed costs cover vehicle payments or depreciation, insurance, permits, IFTA and IRP fees, and telematics subscriptions. Variable costs cover fuel, tires, maintenance, repairs and driver labour. Leaving out fixed costs is a common reason a fleet underprices its work.

### Should I calculate cost per mile per vehicle or for the whole fleet?

Per vehicle is far more useful. A single blended average hides your cheapest and most expensive trucks in one number. Per-vehicle cost per mile shows which unit costs more to run than it earns, and it helps you decide which routes to assign to which vehicle.

### How does telematics improve a cost-per-mile calculation?

It replaces estimates with measured data: real distance driven per vehicle, engine-hour and fault-code data for maintenance, and fuel-card and engine fuel data. With those inputs, cost per mile stops being a rough annual guess and becomes a number you can trust and update continuously.

### Why does utilization affect cost per mile so much?

Fixed costs stay the same however many miles a vehicle drives, so spreading them over more miles lowers the per-mile figure. An underused truck carries the same payment and insurance as a busy one but divides them across far fewer miles, which is how idle assets push up your fleet average without anyone noticing.

## Sources

- [American Transportation Research Institute: Operational Costs of Trucking](https://truckingresearch.org/)