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0.003/mile is many times lower than the typical reimbursement for miles traveled. I once relocated for a job by driving my car across the country and IIRC the

0.003/mile is many times lower than the typical reimbursement for miles traveled. I once relocated for a job by driving my car across the country and IIRC the company reimbursed something like two dozen times as much as that (not including gas, hotel and food expenses.)

AnthonyMouse 7y ago
That's because the typical reimbursement for miles traveled isn't primarily for depreciation, it's for maintenance (and also typically fuel). Corporations also like to estimate this number on the high side, or include amortized depreciation due to time rather than miles even if the vehicle purchase was a sunk cost, because business travel is often tax deductible and this allows the company to offer the employee additional tax-free compensation.
- catalogia 7y ago
  Fuel was reimbursed separately (I remember collecting all the receipts for that, food, and hotels) and I don't think maintenance would account for two orders of magnitude discrepancy. 0.003/mile is abysmally low.
  - AnthonyMouse 7y ago
    If you have a vehicle which is ten years old, even with low miles it generally won't be worth very much, and you can't lose more than the remaining amount by putting additional miles on it. You can't even lose the entire remaining amount, because it will always have at least scrap metal value. This means that for a vehicle you hold for several years, the depreciation due to miles will be very low. You could easily spend many times that amount on maintenance and repairs. One transmission rebuild could cost more than the total amount of depreciation due to miles over the entire life of the vehicle. Just oil changes add up to more than $10,000 over a million miles. Maintenance is a significant expense per mile, even more if you're using "average" vehicles (as companies setting per-mile rates would) which can have significantly higher maintenance costs than the sort of vehicles people choose when they know they're going to be driving a lot of miles.

AnthonyMouse 7y ago

That's because the typical reimbursement for miles traveled isn't primarily for depreciation, it's for maintenance (and also typically fuel). Corporations also like to estimate this number on the high side, or include amortized depreciation due to time rather than miles even if the vehicle purchase was a sunk cost, because business travel is often tax deductible and this allows the company to offer the employee additional tax-free compensation.

catalogia 7y ago
Fuel was reimbursed separately (I remember collecting all the receipts for that, food, and hotels) and I don't think maintenance would account for two orders of magnitude discrepancy. 0.003/mile is abysmally low.
- AnthonyMouse 7y ago
  If you have a vehicle which is ten years old, even with low miles it generally won't be worth very much, and you can't lose more than the remaining amount by putting additional miles on it. You can't even lose the entire remaining amount, because it will always have at least scrap metal value. This means that for a vehicle you hold for several years, the depreciation due to miles will be very low. You could easily spend many times that amount on maintenance and repairs. One transmission rebuild could cost more than the total amount of depreciation due to miles over the entire life of the vehicle. Just oil changes add up to more than $10,000 over a million miles. Maintenance is a significant expense per mile, even more if you're using "average" vehicles (as companies setting per-mile rates would) which can have significantly higher maintenance costs than the sort of vehicles people choose when they know they're going to be driving a lot of miles.