Variable Vehicle Costs
Quick definition
Variable vehicle costs are operating expenses, such as fuel, tires, and maintenance, that directly scale with miles driven.
Full definition
Variable vehicle costs are operating expenses that directly scale with miles driven. Examples include fuel, oil, tires, and routine maintenance and repairs.
Unlike fixed ownership costs, these expenses are tied to vehicle use. In a FAVR program, the variable payment is calculated by multiplying an employee's business mileage by a per-mile rate determined via an analysis of vehicle costs where they live and work.
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