How do you calculate the cost per kilometre of a company car?
The cost per kilometre shows what each trip with a company car really costs you. The formula is simple; the hard part is adding up every cost, not just fuel.
Short answer
- Cost per kilometre = the vehicle's total costs over a period ÷ the kilometres driven in the same period.
- Total costs include fuel, servicing and parts, motor liability and comprehensive insurance, inspections, road vignettes and the share of the purchase cost or lease payment.
- The kilometres are taken from the odometer at the start and end of the period, not from estimates.
- The number is only useful when compared: between vehicles, between months or against a rented car.
What goes into the cost per kilometre
Split the costs into two groups. Variable costs grow with every kilometre: fuel, tyre wear, mileage-based servicing. Fixed costs are paid even when the car is parked: insurance, inspections, road vignettes, the lease payment or depreciation. A car that drives little has a high cost per kilometre precisely because of its fixed costs.
One-year example, a car driving 30,000 km
| Cost | Amount per year | Type |
|---|---|---|
| Fuel | 15,000 lei | variable |
| Servicing, parts, tyres | 4,000 lei | variable |
| Insurance, inspection, vignette | 5,000 lei | fixed |
| Lease payment | 12,000 lei | fixed |
| Total | 36,000 lei | 1.20 lei/km |
A concrete example
The car in the table costs 36,000 lei a year and drives 30,000 km, so 1.20 lei per kilometre. If the same car drove only 15,000 km, the variable costs would roughly halve (9,500 lei), but the fixed ones stay at 17,000 lei. The total would be 26,500 lei, or 1.77 lei per kilometre. That is why a rarely used car can end up costing more than renting one when needed.
Common mistakes
- Calculating with fuel only — the figures come out two to three times lower than the real cost.
- Mixing periods: costs for a year, kilometres for a month.
- Forgetting costs paid once a year (insurance, vignette), which only appear in the month of payment.
- Using estimated kilometres instead of real odometer readings.
How 4fleet helps
- For each vehicle, 4fleet adds up the acquisition cost, service work, the cost of documents (insurance, inspection, vignette) and fuel receipts.
- The vehicle total-cost report divides the sum by the recorded mileage and shows the cost per kilometre.
- Average consumption is calculated from fill-ups with mileage, using the full-to-full method.
- The calculation is cumulative over the vehicle's whole history, not for a given month; for a period, apply the formula above to that period's costs.