The Real Cost of a Trip Is Not the Fuel

The mistake has a direction, which makes it fixable

Almost everyone who compares a drive with a train ticket does it the same way: divide the distance by the fuel economy, multiply by the pump price, and call that the cost of the car. It is a natural mistake, because fuel is the only cost you pay at the moment you incur it. Everything else arrives months later, disguised as an unrelated bill.

The useful thing about this particular mistake is that it always goes the same way: it always makes the car look cheaper than it is, never more expensive. So the fix is not a judgement call, it is an addition. Work out what else the trip caused, add it, and the comparison becomes honest without becoming a matter of opinion.

The four costs a trip actually creates

Fuel first, because it is easy. Gasoline at $3.30 a gallon in a car doing 32 mpg costs 3.30 ÷ 32 = 10.31 cents a mile. This is the only term most people compute, and it is genuinely the smallest of the four in this example.

Tyres are pure distance. A set of four costs about $800 fitted and lasts about 45,000 miles, so 800 ÷ 45,000 = 1.78 cents a mile. Nothing about calendar time enters this — a tyre wears when it turns.

Servicing splits in two, and only one half belongs here. An oil service at $90 every 7,500 miles is 1.20 cents a mile; brake pads and discs at $700 every 50,000 miles are 1.40 cents; the long tail of distance-driven wear — dampers, exhaust, clutch, coolant, the repairs that are not scheduled but arrive anyway — is worth about 2.40 cents on a car of this age. That is 5.0 cents a mile in total. The annual inspection and the time-based part of the service schedule are not in this figure, because they happen whether or not you drive.

The fourth cost is the big one and the one nobody bills you for: the car is worth less at the end of the trip than it was at the start, and part of that loss is caused by the miles rather than by the months.

Splitting depreciation, and the trick that makes it easy

Depreciation is the single largest cost of running a car and the one people are worst at attributing, because it is genuinely two costs wearing one name. A car loses value because it gets older — models get superseded, warranties expire, rubber and paint age — and it loses value because the odometer climbs. Only the second half is caused by a trip.

The trick is to let the used-car market do the separation for you. Look up two examples of the same model and same year, one with 60,000 miles and one with 100,000. In our example they fetch $16,500 and $12,100. The $4,400 difference is caused by 40,000 miles and nothing else, because age is held constant. That is 4,400 ÷ 40,000 = 11.0 cents a mile of distance-linked depreciation, read straight off the market rather than assumed.

The rest of the depreciation is then a subtraction. The car cost $32,000 and is worth $16,500 after five years and 60,000 miles; 60,000 miles at 11.0 cents accounts for $6,600 of the loss, leaving $8,900 caused by time alone — $1,780 a year, which you would pay if the car sat in a garage untouched.

The costs a trip does not create

Insurance, registration, the annual inspection and the time half of depreciation are already spent the moment you own the car. Driving 300 more miles this weekend does not increase them, and staying at home does not reduce them. Loading them onto a single trip is a real error in the opposite direction, and it produces the equally silly conclusion that you should never use the car you are paying for.

There is one honest exception. If the trip is the reason the car exists — if you would sell it, or never have bought it, without the journeys of this kind — then the fixed costs are caused by that pattern of travel and belong in the comparison. That is the test to apply to a second household car: not "what does this trip cost" but "what does the existence of this car buy".

Two numbers, two questions

Add the four distance-linked items and you get the marginal cost: 10.31 + 1.78 + 5.00 + 11.00 = 28.1 cents a mile. Add the fixed items at 12,000 miles a year — $1,780 of ageing, $1,400 of insurance, $180 of registration, $200 of annual service, or $3,560 spread over 12,000 miles — and you get another 29.7 cents. The full cost is 57.8 cents a mile, 2.06 times the marginal figure and 5.6 times the fuel.

Both numbers are correct and they answer different questions. Should I drive to this wedding rather than take the train? That is a marginal question, and 28.1 cents a mile is the right price. Should I keep this car at all, or sell it and rent when I need one? That is a total-cost question, and 57.8 cents is the right price. Using the wrong one is how people end up owning a vehicle that costs $6,930 a year to justify $3,371 a year of driving.

Two published benchmarks say the arithmetic is in the right place. AAA's 2025 Your Driving Costs study puts a new small sedan at 55.9 cents a mile and a new medium sedan at 66.4 cents at 15,000 miles a year, including finance charges; our five-year-old car at 57.8 cents sits between them, as it should. And the IRS standard mileage rate, which exists to approximate the full cost of running a vehicle for business, was 72.5 cents a mile for the first half of 2026 and 76 cents from 1 July.

Occupancy: the honest reason a family still drives

A car's cost barely changes with the number of people inside it. A train's cost is per person. That single asymmetry decides most real comparisons, and it is why the fuel-only argument, wrong as it is, still reaches the right conclusion for families and the wrong one for solo travellers.

Take the 300-mile trip. Fuel alone is $30.94, which is why the car looks unbeatable. The marginal cost is $84.27 and the full cost is $173.27. Against a $65 advance rail fare, one traveller should take the train — $65 beats $84.27 — but two travellers should drive, and four should drive decisively, at $21.07 a head. The break-even is 1.3 people on the marginal figure and 2.7 people on the full one.

Two things the comparison usually forgets, both of which favour the train: parking and tolls are marginal costs of the drive and belong in the car column, while the time on a train is usable and the time at a wheel is not. Neither is captured by cents per mile, and both are worth more than the difference the arithmetic produced.

Where this framework bends

An electric car rearranges the terms rather than shrinking them. The fuel line drops sharply — home charging is often a third of the cost of gasoline per mile — but the depreciation line has been larger, not smaller, on many models, and it is the depreciation line that dominates the marginal cost here. Rerun the same table with your own resale figures before assuming the marginal cost fell.

The second soft spot is that depreciation is the largest term and the least certain, because it is a forecast rather than a receipt. Every other line in the table is a bill you have already paid or a price you can look up today; the resale value is a guess about a market five years out. If you want a conservative marginal figure, run the depreciation line at both the optimistic and the pessimistic resale value and see whether the decision changes. Usually it does not, which is itself worth knowing.

Finally, none of this is an argument against driving. It is an argument against comparing a full price with a partial one. Once both sides of the comparison are built the same way, the car wins some journeys outright and loses others by more than anyone expected — and you get to know which is which before you set off rather than at the end of the year.

Frequently asked questions

What is a reasonable cost per mile for an ordinary car?

For the marginal cost of driving a mid-size gasoline car, 25 to 35 cents a mile covers most cases. For the full cost of ownership, 50 to 70 cents is the usual band, and AAA's published study puts a new small sedan at 55.9 cents and a new medium SUV at 83.9 cents at 15,000 miles a year. If your own figure is far below the band, you have probably left depreciation out.

Should insurance be included when comparing a drive with a train ticket?

Not for a one-off trip in a car you already own and insure, because the premium is the same whether you go or stay. It should be included if the journey is the reason you keep the car — then the premium is a cost of that travel pattern, not of the vehicle sitting still. The test is simple: would this bill be different if the trip did not happen?

How do I work out the distance-linked part of depreciation for my own car?

Search a classifieds site for your exact model and model year, then note the asking prices of two examples that differ mainly in mileage — say 60,000 and 100,000 miles. Divide the price gap by the mileage gap. Holding the year constant is what makes this work: it removes age from the comparison, so what is left is the price of the miles. Do it with several pairs and take the middle value.

Does driving fewer miles a year make a car cheaper or more expensive?

Both, and that is not a paradox. Total annual spending falls, because you buy less fuel and wear out fewer tyres. Cost per mile rises, because the fixed costs are divided among fewer miles. At 12,000 miles a year our example costs 57.8 cents a mile; halve the mileage and the fixed 29.7 cents doubles to 59.4, pushing the total towards 88 cents a mile even though the annual bill has dropped by about $1,700.

Why is the official mileage reimbursement rate so much higher than my fuel cost?

Because it is deliberately a full-cost rate, not a fuel rate. The IRS set the business standard mileage rate at 72.5 cents for the first half of 2026 and 76 cents from 1 July, against a fuel cost of roughly 10 cents a mile for a 32 mpg car. The difference is depreciation, insurance, tyres, servicing and repairs — exactly the items this article makes explicit, bundled into one number so nobody has to itemise them.