The Real Cost of Mileage in 2025: What $0.60 Per Mile Tells Us

If you’re running a mixed vehicle reimbursement program in 2025, you’ve probably seen this number come up: $0.60 per mile. 

That’s the average rate companies are landing on when they combine the IRS standard mileage rate for low-mileage drivers with Fixed and Variable Rate (FAVR) reimbursements for their road warriors.

It’s not a one-size-fits-all model, but that’s the point. The final cost per mile depends on how many employees fall into each driving category. Still, this $0.60 benchmark offers a lot of insight into what businesses are actually spending, and what’s working in today’s vehicle programs.

What Goes Into the $0.60 Figure?

Let’s break it down. 

The IRS standard mileage rate in 2025 is $0.70 per mile, but that’s a benchmark. It’s ideal for employees who drive occasionally or inconsistently. It doesn’t factor in regional differences in fuel, insurance, or maintenance.

On the flip side, FAVR programs take a more personalized, tax-efficient approach. They split reimbursements into fixed costs (like insurance and depreciation) and variable costs (like gas and tire wear), all based on where and how much someone drives. It’s especially effective for high-mileage drivers who would otherwise be over- or underpaid using a flat rate.

So when companies combine the two, using CPM for occasional drivers and FAVR for frequent travelers, the average settles around $0.60 per mile across the whole driver base. That’s a mixed program that reflects real-world usage and cost management.

Why Mixed Programs Make Sense

More organizations are adopting a mixed model for one simple reason: flexibility. Not every employee drives the same amount, and trying to reimburse everyone using the same method leads to overspending or under-supporting.

The $0.60 average isn’t a target, it’s a result. It shows that when companies match the right reimbursement to the right driver, they land on a smarter, more sustainable cost per mile. 

Road reps with 20,000+ miles a year get a FAVR rate that covers their actual expenses. Office-based team members who drive occasionally get a fair, flat reimbursement with the IRS rate.

And because FAVR is tax-free when structured correctly, companies avoid the payroll tax waste that comes with taxable stipends. That means more money goes to the driver, and less goes to the IRS.

What This Means for Your 2026 Planning

If you’re budgeting for next year’s vehicle program, that $0.60 average is a great benchmark. But don’t stop there. Look at your own driver population. Ask yourself: What percentage of your employees are low-mileage drivers? How many are in the field every day?

The more accurately you segment those groups, the closer you’ll get to an efficient blended rate, and a fairer program overall. 

With tools like Cardata Mobile, you can track who’s driving what, when, and where. That data helps you decide who belongs in a FAVR program versus who should stick with CPM.

And if your current policy is still relying on flat stipends, now’s the time to explore smarter alternatives. A well-designed reimbursement plan not only improves compliance and fairness, it also helps you avoid costly overpayments.Want help building a program that fits your unique workforce? Talk to our experts today and see what’s possible.

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