Cost per mile, and what it tells you

Cost per mile is the total cost of running a vehicle divided by the miles it covered. Calculated per vehicle rather than per fleet, it answers replacement timing, in-house versus outsourced, and which vehicles are quietly costing you a fortune.

What goes into it

Decide once, write it down, and apply it identically to every vehicle. Consistency matters more than which convention you pick.

• •Fuel or energy
• •Scheduled maintenance, labour and parts
• •Unscheduled repairs
• •Tyres
• •Insurance and licensing
• •Depreciation, or lease cost
• •Downtime, if you can put a number on a vehicle being off the road

The fleet average hides the answer

Sort every vehicle by cost per mile and look at the ends. The top of that list is usually two or three vehicles costing several times the median, and they are the entire conversation. The average tells you nothing you can act on.

Separate fixed from running costs

Insurance and depreciation happen whether the vehicle moves or not, so a low-mileage vehicle will always look expensive per mile. Splitting the two prevents the wrong conclusion, which is that the quiet van is the problem when it is really under-used.

A vehicle with a high cost per mile and low mileage is usually a utilisation problem. High cost per mile with high mileage is a maintenance or age problem. Different answers.

Using it for the replacement decision

Plot cost per mile against age for each vehicle class. It falls as warranty repairs and early depreciation drop away, sits flat, then rises. The turn upwards, sustained over two periods, is the economic replacement point, and it is usually earlier than fleets expect.

Using it for the in-house or outsourced call

Compare your maintenance cost per mile against quoted rates, and include the parts of your own cost that are easy to forget: workshop premises, tooling, training, diagnostic subscriptions and the cost of a vehicle travelling to a garage. Fleets that skip those find in-house looks cheap right up until somebody does the full arithmetic.