Car Depreciation Per Mile Calculator
Estimate car depreciation per mile from purchase price, resale value, miles driven and optional ownership costs.
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Example Scenarios
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What Depreciation Per Mile Shows
Depreciation per mile is the loss in vehicle value divided by miles driven. It is useful when comparing two cars, checking whether a mileage allowance covers the real car cost, or deciding whether a low-mileage car is carrying a high monthly loss. It is not the same as fuel cost, servicing cost or total ownership cost. A car can be cheap on fuel but still expensive per mile if the value drops quickly.
The cleanest calculation uses a purchase price and a realistic sale value. Finance interest, sale preparation, return charges and maintenance are shown separately because they are real cash costs but not all are depreciation. The page also shows a total cost per mile when you include those optional lines. That wider figure is often closer to the amount a driver actually needs to recover.
Formula Method
Depreciation: starting value – ending value.
Depreciation per mile: depreciation / miles driven.
Ownership cost per mile: depreciation + finance costs + prep costs + other ownership costs, divided by miles driven.
1 Choose the value you actually paid or the value at the start of the comparison.
2 Use a realistic disposal value, preferably from more than one current valuation source.
3 Use odometer miles for the period, not annual mileage guessed from habit.
4 Keep finance and repair costs visible so they do not get mistaken for market depreciation.
When The Estimate Can Mislead
A depreciation estimate is only as good as the resale value. Trade-in values, private-sale prices, auction values and finance settlement figures can be very different. Mileage, service history, tyres, accident history, warranty, battery condition, colour, trim, local demand and stock levels can all change the result. For PCP and lease agreements, the balloon value or guaranteed future value is not always the same as open market value.
Depreciation Checks By Use Case
| Use Case | Value To Enter | Check Before Relying On It |
|---|---|---|
| Privately owned car | Paid price and realistic sale value | Private sale and trade-in can differ |
| PCP car | Cash price and expected market value | Balloon payment is a finance figure |
| Lease return | Total lease cash and return charges | Lease does not create a resale value for you |
| Company allowance | Car value loss and mileage rate | Taxed allowance may not cover depreciation |
| Electric vehicle | Market value and battery condition | Incentives and used demand can move fast |
| Older car | Current value and likely scrap or resale value | Repairs may exceed depreciation |
| Low annual miles | Actual miles in period | Monthly loss may be high per mile |
| High annual miles | Odometer change and condition impact | Extra miles may reduce resale sharply |
Worked Examples
New Car Over Three Years
28,000 to 16,000 pounds: 12,000 pounds of depreciation over 30,000 miles is 40p per mile before finance or upkeep.
Used Car With Slower Loss
12,000 to 8,500 pounds: 3,500 pounds over 24,000 miles is about 15p per mile, before repairs.
Low-Mileage Car
Small miles can look costly: a 6,000 pound loss over only 9,000 miles is about 67p per mile.
Comparing With HMRC Mileage Rates
HMRC Approved Mileage Allowance Payments for employees using their own cars for qualifying business travel are 45p per mile for the first 10,000 business miles in the tax year and 25p per mile thereafter. Those rates are not a depreciation table, but they are a useful benchmark because they are intended to cover more than fuel. If your depreciation alone is close to the mileage rate, then fuel, insurance, servicing and tyres may push the true cost above reimbursement.
FAQs
Is depreciation per mile the same as running cost?
No. Depreciation per mile is only the value lost per mile. Running cost can also include fuel, insurance, servicing, tyres, repairs, tax, finance charges and parking. This page shows both pure depreciation and a wider ownership cost when you enter optional costs.
What resale value should I use?
Use a realistic value from current trade-in, private-sale or finance settlement checks. Advertised asking prices can be higher than the amount a seller actually receives, so it is sensible to test a cautious value as well.
Why does low mileage increase pence per mile?
Many cars lose value with time as well as mileage. If a car loses 6,000 pounds over three years but only covers 9,000 miles, the value loss is spread over fewer miles, making the per-mile result high.
Should finance interest be part of depreciation?
Finance interest is not market depreciation, but it is a real cost of owning or using the car. Keep it in the separate finance field so you can compare pure value loss with total cash cost.
Can this judge a PCP deal?
It can help compare the car’s value loss with mileage and finance costs, but it cannot judge all PCP terms. Balloon payment, mileage cap, return condition, early settlement and market value all matter.
Does it work for electric cars?
Yes, if you enter realistic starting and ending values. Battery condition, warranty, charging standard and used-market demand can make EV depreciation different from petrol or diesel cars.
Should I include private miles?
For depreciation per mile, include all miles that affect the car’s value. For business reimbursement, separate qualifying business miles from private miles and check HMRC or employer rules.
Sources
- HM Revenue and Customs. (2026). Travel – mileage and fuel rates and allowances. GOV.UK. https://www.gov.uk/government/publications/rates-and-allowances-travel-mileage-and-fuel-allowances/travel-mileage-and-fuel-rates-and-allowances
- MoneyHelper. (n.d.). Buying, leasing or renting a car. Money and Pensions Service. https://www.moneyhelper.org.uk/en/everyday-money/buying-and-running-a-car/buying-leasing-or-renting-a-car
- Financial Conduct Authority. (n.d.). Car finance explained. Financial Conduct Authority. https://www.fca.org.uk/consumers/car-finance