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Fleet Webinar Part 2 - Calculating Cost Per Mile

By Bill DeBoer on Jul 15, 2022 12:39:00 PM

Topics: DeBoer's Auto

Calculating your cost-per-mile on your fleet is much different than calculating miles-per-gallon of gas. The cost-per-mile is simple to figure out, but many business owners don’t take it seriously enough and could be wasting a lot of money throughout the years. You can make the calculations as simple or as detailed as you want. The more detailed you get, the better the information you’ll have and the more informed decisions you can make. Here’s what you need to know about calculating cost-per-mile for your fleet.

Why Is Your Cost Per Mile So Important?

 

Understanding your company’s cost-per-mile is an important tool that will help you make better business decisions in many different areas. Your goal should be to maximize the lifespan of every vehicle rather than buy a new one every couple of years. Of course, this depends on how many miles are driven, how well it is maintained, and other factors. The lower your cost-per-mile is, the better your bottom line should look.

Break Down Your Cost Per Mile With A Simple Equation

A simple equation to find out your cost-per-mile is to take your costs and divide them by the mileage on the vehicle. So if your costs are $2,200 and you drove 20,000 miles, then your cost-per-mile would be $0.11 per mile in this example. Now let’s look at a couple of real-life examples of business owners we have worked with and helped.

Cost per MileIf a company purchases a new vehicle every 100,000 miles rather than getting it maintained and extending the life of the vehicle as much as possible, they would be looking at roughly $0.51 cost-per-mile. This is just an estimate and can be higher or lower depending on the cost of the vehicle and other factors. 

In another example, a company purchases a vehicle for the same cost, but follows a regular maintenance plan and spends roughly $30,000 in maintenance through the first 250,000 miles. By opting for regular maintenance instead of buying a new vehicle every 100,000 miles, this company operates at a cost-per-mile of about $0.28 per mile. 

How Regular Maintenance Can Reduce Your Cost-Per-Mile

A cost-per-mile difference of $0.28 and $0.51 might not seem very significant. But when you think in big-picture terms and when you drive more than 600,000 miles every year, you could easily be looking at savings of $100,000 or more. So while regular maintenance might seem expensive on the surface, it’s actually an investment you can’t afford to miss out on.

Be sure to contact us at DeBoer’s Auto to learn more about how we can help you lower your cost-per-mile on your fleet.

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Bill DeBoer

Written by Bill DeBoer

William J. DeBoer (Bill Jr.) is Co-owner and Vice President at DeBoer’s Auto. As the company’s General Manager, Bill has been responsible for bringing innovations in daily operations to the full-service, high-tech auto repair facility for 20+ years. Passionate about computers from an early age, Bill’s interest in technology gravitated to cars while he was in college. By obtaining a Certificate in Automotive Technology followed by a B.S. in Business Management from Penn State, Bill was able to fuse his interests into a car technology specialization and join the family business shortly thereafter.