Your Cars per Kilometer Cost
So you’ve started using your car for work, and your employer might be giving you a per kilometer rate, but is it really enough? Well here’s our opinion on that. Let’s start off with an easy one, fuel. How much does your car use in fuel? And we’re going to go a little old school here, no fancy in car gauges (those can’t be relied on). Step 1, fill up your car. Step 2 reset your odometer. Step 3, drive it an average way that you normally would (you want to get as distance as you can, but without going out of your regular driving habits) and then fill up again at a gas station. Now look at your odometer, and if it reads 123.4km then divide the amount of liters it took by 1.234, now you have your L/100km, so divide that again by 100 and you have your Liters/1km, so now all you need to do is multiply it by the price of the gas. This gives your cost in fuel per 1km of driving. But that was the easy part. The rest is a little more complicated and require a general idea of your annual or monthly driving distances. These are the factors we need to consider and later all add to our fuel per kilometer amount.
Car Depreciation/1km = Purchase Price (including your interest and taxes) - Estimated Selling Price = Your Depreciation / (divide) Approximate Total Driving Distance (i.e. 56,700km) = This equals your vehicle depreciation per kilometer.
Maintenance Costs = Add up all your bills from any given time, the longer the better and divide by the approximate distance driven in that time. (i.e. $4560 in repairs over a year / 34,500km driven in that year).
Insurance Costs = This ones easy. Take your annual policy dollar value (hope you told your insurance company about using your car for work) and again just like before divide by your annual distance driven.
Do the same for any other costs your vehicle may incur such as marketing/decals, special equipment or accessories etc and divide them by the distance driven over the time those costs are incurred.
Now that we have all the figures, add them all up. Add up your fuel cost/km + Depreciation/km + Maintenance/km + Insurance/km + Others/km and you are left with… A per kilometer cost on your car. Wow, it’s pretty big eh. Doesn’t make cabs seem that much more expensive any more. So there you have it, now ask yourself if that 45 cents per kilometer is good enough or not. As always drive safe and we hope that we can earn your business on any of your vehicles’ needs. We are a great alternative to the dealer, in parts, services and prices! Give Top Gear a try the next time that you need a mechanic in London Ontario.
Here are some apps that help you figure it out too
Android
https://play.google.com/store/apps/details?id=it.micheletedeschi.costichilometrici
Apple
https://itunes.apple.com/ca/app/gas-manager-fuel-consumption/id448662326?mt=8
And stay tuned next week as we talk about how to reduce your cost per kilomter ;)