If you’re like most people you probably don’t think much about your car’s mileage rate. After all what does it really matter? As long as your car gets you from Point A to Point B that’s all that counts right?
Wrong.
Your car’s mileage rate is actually a very important number and it can have a big impact on your budget and your overall financial health. Here’s why:
The average person drives about 15000 miles per year. That means that over the course of a typical 5-year car loan you will end up paying for 75000 miles of driving.
At a mileage rate of 20 cents per mile that comes out to $15000 in total driving costs. But at a mileage rate of 30 cents per mile that total cost jumps to $22500.
That’s a difference of $7500 – or enough to buy a brand new car! – over the life of the loan.
So how do you calculate your car’s mileage rate? It’s actually pretty simple:
Take the total cost of ownership for your car (including things like insurance gas and maintenance) and divide it by the number of miles you drive in a year.
For example let’s say that the total cost of ownership for your car is $10000 per year. If you drive 15000 miles per year your mileage rate would be 20 cents per mile ($10000 ÷ 15000 = 20).
Now that you know how to calculate your car’s mileage rate you can start to think about ways to save money on your driving costs. Here are a few tips:
1. Drive less.
This one is pretty obvious but it’s worth mentioning. The less you drive the less you’ll have to pay in total driving costs. If you can carpool take public transportation or ride your bike instead of driving you’ll save money.
2. Buy a more fuel-efficient car.
If you’re in the market for a new car look for one that gets good gas mileage. The less you have to spend on gas the lower your overall driving costs will be.
3. Maintenance matters.
Keep your car in good working order and you’ll save money in the long run. Regular oil changes and tune-ups will extend the life of your car and help it run more efficiently.
By following these tips you can lower your car’s mileage rate and save money on your driving costs. So the next time someone asks you why you care about your car’s mileage rate you’ll have a ready answer.
How do you calculate mileage rate?
The mileage rate is calculated by multiplying the number of miles driven by the IRS standard mileage rate.
How many miles can you claim on your taxes?
You can claim up to 500 miles on your taxes.
What is the standard mileage rate for 2018?
The standard mileage rate for 2018 is 54.
5 cents per mile.
Do you have to keep receipts for mileage?
Yes you need to keep receipts for your mileage in order to claim it on your taxes.
How do you calculate business mileage?
You calculate business mileage by multiplying the number of miles driven by the business by the IRS standard mileage rate.
Can you claim mileage if you use your personal vehicle for business?
Yes you can claim mileage on your taxes if you use your personal vehicle for business purposes.
How do you calculate medical mileage?
You calculate medical mileage by multiplying the number of miles driven for medical purposes by the IRS standard mileage rate.
How do you calculate charitable mileage?
You calculate charitable mileage by multiplying the number of miles driven for charitable purposes by the IRS standard mileage rate.
What are the qualifying charitable organizations for mileage?
Qualifying charitable organizations for mileage include religious educational scientific literary testing for public safety fostering national or international amateur sports competition and preventing cruelty to children or animals.
How do you calculate moving mileage?
You calculate moving mileage by multiplying the number of miles driven for the purpose of moving by the IRS standard mileage rate.
How do you calculate mileage for job-related moves?
You calculate mileage for job-related moves by multiplying the number of miles driven for the purpose of moving by the IRS standard mileage rate.
How do you calculate mileage for education?
You calculate mileage for education by multiplying the number of miles driven for the purpose of education by the IRS standard mileage rate.
How do you calculate mileage for business purposes?
You calculate mileage for business purposes by multiplying the number of miles driven for business by the IRS standard mileage rate.
How do you calculate mileage for moving purposes?
You calculate mileage for moving purposes by multiplying the number of miles driven for the purpose of moving by the IRS standard mileage rate.
How do you calculate mileage for medical purposes?
You calculate mileage for medical purposes by multiplying the number of miles driven for medical purposes by the IRS standard mileage rate.
