When fuel prices rise, most of us focus on how much it costs to fill up. Who wouldn’t? You fill up and are presented with a bill for what amounts to a down payment on a small village, and you can’t believe you have to pay for this pleasure two or more times a month. The reality is, though, this is not the true cost of your vehicle. In fact, the cost is much more. 

If you want a realistic picture of how much your vehicle is costing you, you need to look beyond the fuel tank. Your real cost per kilometre (CPK) includes fuel, maintenance, tyres, insurance, depreciation, and more. 

Now, you might just be curious, but the cost per kilometre can help in a number of areas. For example, this information can help if you’re choosing between vehicle options, budgeting for a road trip, deciding if commuting is worth it, or even tracking business mileage for tax or reimbursement. 

To give you all the information you need in order to calculate your cost per kilometre more accurately, follow this simple step-by-step explanation.  

Step 1: Calculate Your Annual Costs 

This might take more than a few minutes, but it is well worth the effort to get an accurate idea of what your vehicle costs you each month. To help, we have put together the expenses you should include. 

Add up these expenses together: 

The expenses you should include are: 

• The fuel (the total litres used per month multiplied by the fuel price)  

• Your maintenance and repairs costs (services, brakes, oil, etc.)  

• Your tyres (what it would cost to replace your tyres in a few years) 

• The monthly insurance fees 

• The licence fees 

• Use an online calculator to estimate the drop in your car’s value over 12 months. 

Step 2: Track Your Kilometres 

To work out your cost per kilometre , you will have to know how much you’re driving around. This is easy enough if you jot down your daily trips and then use a GPS tool, like Google Maps, to calculate each trip. You can then multiply these distances by frequency. 

So, if you’re taking the kids to school (12kms) and then going to work (9kms), and then back to school (9kms) and back home (12kms). That’s 42 kilometres every weekday, so you can multiply this by five days, and then again by the number of school weeks in the year.  

Ultimately, you will come up with an estimate of how far you drive each year. Now, let’s say that this figure comes to 15,000 km per year. You would then divide your total annual car costs by that figure and the result is your cost per kilometre. 

Step 3: Run The Numbers 

Once you have done the legwork and gotten all the facts and figures, it’s time to run the numbers.  

Let’s say you spend: 

• R30,000/year on fuel 

• R8,000 on maintenance 

• R5,000 on insurance 

• R2,000 on licence 

• R15,000 in depreciation 

Your total would come to R60,000 and once you’ve divided this by the number of kilometres you drive per year, you should arrive at your cost per kilometre. Essentially, if you divide R60,000 by 15,000 km, the cost comes to R4 per kilometre. 

This is how you get a more realistic cost than if you were to just look at your fuel economy. 

Step 4: Now You Can Budget Smarter 

Once you know your real cost per kilometre, you can compare it against the cost of public transport or carpooling. You can assess how much a daily commute would actually cost you. It would also help you to set a more accurate budget for road trips or long drives. Let’s not forget that you can also make informed decisions about vehicle upgrades or replacements. 

Feeling Informed? 

Clearly, looking at the price of a tank of fuel is not sufficient. We trust that this information will help you work out what it’s really costing you to drive around and help you make calculated choices in the future. 

If you’re looking for more practical advice, budget-friendly ideas, and planning tools then please take a few minutes to explore AA Inform.