STEP 1 - The Cost of the Car
First things first, how many miles, on average do you drive your car per year? This average should be estimated over the life of your car.
The average American driver racks up 13,500 miles per year. Males drive 64% more miles than females with a 16,600 average for males compared to 10,100 miles for females.
How much did you car cost? You should include all Sales Tax and other one time costs at vehicle purchase, but don't include finance charges in this item.
Average transaction price for a new car was $33,652
Source: Kelly Blue Book (2016)
Average retail price for a used car was $19,400
Source: Edmunds Quarterly Report (2016)
If you financed your car what are your estimated total finance charges? This information is disclosed to you when you sign for a loan.
How many years do you plan to own your car?
The average age of vehicles on the road has climbed to 11.5 years, primarily driven by improving quality.
Source: IHS Automotive
If you plan to sell your car how much do you expect to receive? Don't overestimate!
On average, a new car will lose 60 percent of its total value over the first five years of its life. This value is highly variable.
STEP 2 - The Cost of Operations
What is your average Miles Per Gallon? Also, do you use regular gasoline or do you require premium?
What is your annual cost for vehicle upkeep? This includes all maintenance and repairs. Also make sure this estimate includes tires.
What is your annual cost of vehicle registration and car related taxes?
What is your annual insurance cost?
STEP 3 - Calculate
Use the NinjaPiggy Calculator to quickly calculate your total Cost Per Mile.
STEP 4 - Let's Compare
Now that you know your CPM let's look at how you can use it to make better financial decisions.
Most people underestimate their total CPM since costs are spread over many items and time periods.