How to Split Car Costs Fairly: Fuel, Repairs, Insurance, and Depreciation

I live in Cologne and design for a living, which means I do a lot of “it depends” thinking. Money decisions are like design briefs—clear goals, messy constraints, and lots of feelings. Splitting car costs is the same. It’s not just fuel or a single bill. It’s insurance, repairs, tires, depreciation—the invisible slide of value over time. And when life changes, the math changes with it.

These are the scenes where car cost splits either worked for me—or didn’t—and what I’d try next time. I’m not selling a hack. I’m offering fair ways to make sense of it. Use my experience if it helps; adapt if it doesn’t.

Before we get into the stories, a quick backbone for what “fair” can look like, based on credible references:

Simple benchmark: The IRS business rate for 2025 is 70¢ per mile. It’s an all‑in estimate that includes fixed and variable costs and applies to gas, diesel, hybrids, and EVs (IRS 2025; Publication 463).
Precision method: FAVR (Fixed and Variable Rate) separates fixed costs (insurance, registration, depreciation) from variable costs (fuel, maintenance, tires), then allocates them differently (Publication 463).
Model‑specific reality checks: AAA and Edmunds publish “total cost of ownership” methods that account for depreciation, insurance, fuel, taxes, maintenance, and repairs. Depreciation is usually the largest cost, and EVs often depreciate faster than average (AAA; iSeeCars; Edmunds).

Those three ideas—the simple per‑mile benchmark, the FAVR‑style split, and model‑specific TCO—frame everything that follows.

Vignette 1: The One-Number Truce

Scene: Tuesday evening, wet cobblestones, a quick grocery loop and a detour to pick up a print run. The car has been passed between two of us for days. Somewhere in there, the needle moved; somewhere else, a charging session got forgotten. Receipts live in pockets and a jacket that migrated flats last week.

Tension: We kept squinting at each other over small sums. One person filled up but barely drove. Another drove the most and forgot to log the electricity from a public charger. Reconstructing everything made us feel petty.

Choice: We stopped micromanaging and agreed to a single, all‑in per‑mile rate—70¢ per mile in 2025. The IRS sets that as the business standard mileage rate, and it’s intentionally a bundle: fuel/energy, maintenance and repairs, insurance, and depreciation. The IRS also notes it covers gas, diesel, hybrids, and EVs. It’s not customized to our car; it’s a reference number meant to be fair on average.

What we did: We took quick odometer photos when swapping keys, entered miles later, and settled up. No fuel math. No tire math. No guessing on depreciation.

Result: Fewer arguments, more dinners. The administrative overhead went down to “two photos and a line item.” Did it perfectly track our actual car and local prices? No. Did it feel like a fair handshake that valued our relationship over perfect precision? Yes.

Lesson: If your real friction is the constant tallying, a one‑number truce keeps the sharing soft. The IRS rate changes over time; we can revisit annually. As a designer, this is my version of “ship it”—good enough to use, easy enough to keep.

Vignette 2: The Split That Survived a Busy Quarter (FAVR‑style)

Scene: A client sprint filled my calendar with motorway trips. Meanwhile, a friend mostly parked the car near their studio, needing it for short hops. Our one‑number truce started to feel blunt. I was eating more tires and brakes; they were “paying” more as if driving long distances when they weren’t.

Tension: The per‑mile approach charged each of us the same all‑in rate, but our usage patterns diverged. Insurance and registration didn’t change when I racked up highway miles; tire wear did.

Choice: We took a FAVR‑style approach (“Fixed and Variable Rate”), a framework the IRS describes in Publication 463. Fixed costs like insurance, registration, and depreciation are allocated by each person’s share of total miles or by “access” (for example, days the car is tied up for someone’s use). Variable costs like fuel/energy, maintenance, repairs, and tires are split by the actual miles each person drives.

What we did:

Fixed bucket: insurance, registration/fees, and a depreciation estimate. We allocated these by our share of total miles for the quarter. In a household where someone keeps the car for days without driving much, you could instead allocate fixed by days of access.
Variable bucket: fuel and charging, maintenance, and tires. We allocated these by odometer‑logged miles.
Energy costs: For estimating per‑mile energy, we checked the U.S. Department of Energy’s Alternative Fuels Data Center methodology—its calculators outline how to turn fuel or electricity into per‑mile costs for different powertrains. For mixed fleets or “sometimes we drive an EV, sometimes a compact gas car,” separating fuel/energy per mile by powertrain keeps the variable bucket honest.
EV maintenance: We noted that Consumer Reports finds EVs typically cost less to maintain over time than gas vehicles, with home charging often reducing operating costs. That reinforced allocating variable costs by actual miles and powertrain, not averages built for gasoline alone.

Result: The person with long‑distance loads paid a bigger slice of the variable bucket, and the person who mostly “hosted” the vehicle picked up a reasonable part of the fixed bucket. No one felt penalized for the other’s driving style.

Lesson: FAVR is a little fussy upfront—more categories, more agreement—but it protects friendships when usage diverges. It’s the “measure twice, cut once” of shared‑car math.

Vignette 3: Insurance Anxiety and Building a Fair Split

Scene: A renewal envelope with an eye‑twisting number. No accidents, no changes, just an increase. It felt arbitrary and, honestly, personal. We were splitting evenly, and suddenly even felt uneven.

Tension: Insurance has been rising in many places. The Bureau of Labor Statistics reported double‑digit increases in motor vehicle insurance in 2024. Transportation CPI updates show insurance as a top driver of inflation in early 2025, while gasoline prices moved differently at times. A policy can reprice mid‑term, and location matters a lot. It wasn’t that our split was wrong; it was that our input suddenly got louder.

Choice: We rebuilt our logic around transparency and evidence instead of “we’ll wing it.”

Things that helped:

Know the drivers of premiums: The National Association of Insurance Commissioners (NAIC) lists rating factors like location, miles driven, and how the vehicle is used. That made a miles‑based allocation feel fairer and easier to explain.
Consider usage‑based insurance (UBI): Many insurers offer telematics programs to align premiums with actual miles and driving behavior. If our household miles truly differ, UBI can make the premium more proportional.
Accept volatility: The Treasury’s Federal Insurance Office and consumer reports point to significant premium increases in recent years, with big differences by state. Insurify’s outlook projects further increases on top of prior hikes. We can’t control the market, but we can agree on how to react: adjust allocations at renewal or when the insurer reprices.
Update cadence: With insurance and maintenance costs rising in recent years, we agreed to revisit our split at least annually, and earlier if a premium shock landed.

Result: Even when the premium rose again, it didn’t land as an accusation. We were splitting by miles (or another agreed factor), documenting odometer readings, and keeping a note of what changed and when. Bills became easier to talk about than the feelings they triggered.

Lesson: Insurance isn’t just a number; it’s a signal. If you can connect the premium to miles, to behavior, or to a policy’s details (UBI vs. standard), you can keep the conversation factual and fair.

Vignette 4: Depreciation, the Silent Majority

Scene: A late‑night redesign session—fonts everywhere, coffee gone cold—and a debate over whether we were “paying each other back too much” for routine trips. We’d been focused on energy and tires. Then we looked at depreciation.

Tension: Depreciation is easy to ignore because no one pays it at a pump. But AAA’s long‑running “Your Driving Costs” analysis shows it’s typically the largest share of owning a car. In its latest update, average fuel was about 13.0¢ per mile, while depreciation dominated the cost stack. For households that only split fuel, the person doing lots of long miles is underpaying the true cost of those miles; the person doing short but depreciating years is overpaying.

Choice: We grounded our split in model‑aware cost data:

TCO references: Edmunds’ True Cost to Own and AAA’s methodology both break ownership into depreciation, financing, taxes and fees, insurance, fuel/energy, maintenance, and repairs over five years at a standard annual mileage. You can turn those totals into a per‑mile number by dividing five‑year cost by 75,000 miles. That gives you a vehicle‑specific per‑mile benchmark, not just an all‑market average.
Depreciation differences: iSeeCars finds that five‑year depreciation varies widely across market segments and powertrains—industry average near the mid‑40% range in their study period, with EVs often depreciating faster and hybrids often slower. If one of you drives an EV and the other a gas car, equal per‑mile splits can misallocate hidden costs unless you calibrate for the model.
Anchoring across years: If you started sharing in a prior year, AAA’s earlier “Your Driving Costs” report can serve as a baseline, with yearly adjustments so legacy agreements don’t fall out of step with reality.

Result: We stopped pretending fuel defines the car’s cost. Instead, we treated depreciation as a first‑class cost, using TCO and segment‑specific depreciation patterns to avoid skewing the split against one person’s car or powertrain.

Lesson: Don’t let depreciation be the ghost in the room. Whether you use a simple IRS‑per‑mile benchmark or a custom TCO, make sure your split acknowledges that the car is losing value every year independent of fuel.

Vignette 5: A Sanity Check With a Carpool Calculator

Scene: Three of us started a weekly coworking day with one car. We wanted a quick, non‑arguable way to set a baseline before we layered on more rules.

Tension: No one wanted to build a spreadsheet on day one. We needed a neutral test to keep the vibes intact.

Choice: We tried regional commute/carpool calculators from transportation agencies. Many of these tools are grounded in AAA per‑mile assumptions and let you tweak trip distance and car type to see estimated costs.

Result: It gave us a ballpark for an all‑in per‑mile cost. We didn’t stop there—our household is more complex—but seeing a public baseline softened expectations. People understood that “gas price today” isn’t the same as “what driving truly costs.”

Lesson: A neutral calculator can be a trust primer. Even if you end up using FAVR or a model‑specific TCO, start by sanity‑checking with something familiar and external.

How to Choose Your Split Method

There isn’t one correct answer—just a better fit for your household’s shape. Here’s how I frame it, drawing directly from the references mentioned:

Default simplicity: Use the IRS standard mileage rate (70¢/mile for 2025) when you want an all‑in figure that’s accepted and easy to track. It covers fuel/energy, insurance, maintenance/repairs, and depreciation across gas, diesel, hybrid, and EV. Good for friends, roommates, and lighter‑weight arrangements where ease matters more than precision.
Mid‑level precision (FAVR‑style): Split fixed costs (insurance, registration, depreciation/lease) by each person’s share of total miles or access, and variable costs (fuel/electricity, maintenance, tires) by actual miles. This is work upfront—photos of odometers, saving receipts—but it calibrates better if one person is the road‑warrior and another mostly parks. Consider also whether usage‑based insurance fits: if your insurer’s UBI rates meaningfully tie premiums to miles or behavior, use that to guide the fixed bucket.
High precision (model‑specific TCO): Use AAA or Edmunds TCO to derive a vehicle‑specific per‑mile number (5‑year cost divided by 75,000 miles), then split your actual miles at that rate. Adjust for EV vs. gas per‑mile energy cost using transparent methodology (DOE AFDC). This is sensible when you want to avoid misallocating depreciation (for instance, sharing an EV that depreciates differently than a compact gas car) or when large dollar decisions ride on the split.

Practical Moves That Made It Easier

These are less about math and more about keeping the peace. They’re grounded in the reality that costs move and sources suggest treating updates as part of the plan:

Decide your audit trail: Photos of odometers at hand‑offs are quick. If you want even less friction, usage‑based insurance can put mileage on paper for you. Save receipts for maintenance and tires. Keep a shared note with dates when premiums change.
Update at clear moments: Revisit at renewal, at any mid‑term repricing, or annually. Insurance and maintenance costs have been rising, and energy prices can move independently; a set‑and‑forget split will drift.
Be energy‑specific when you must: For EVs, the per‑mile cost depends on where and how you charge. DOE AFDC’s methodology is transparent about assumptions; borrow it to estimate variable energy cost per mile that fits your situation. That way, fast‑charging days don’t get averaged into home‑charging weeks.
Acknowledge powertrain differences: EVs generally have lower maintenance costs than gas cars over time, but can depreciate faster depending on the segment. If you’re mixing cars or rotating who drives which vehicle, use model‑specific TCO or per‑mile estimates to keep things fair.
Map your costs to a clear set of categories: AAA’s methodology is a good template: depreciation, finance, fuel/energy, insurance, license/registration/taxes, maintenance/repairs, and tires. In my ledger, I mirror those categories and group them into fixed vs. variable. When I’ve logged shared expenses in Monee, keeping those categories consistent helped us talk about decisions, not just numbers.

What About Edge Cases?

Someone keeps the car all week but barely drives: You might allocate fixed costs by days of access and variable costs by miles. That way, the person “reserving” the car still shares the insurance and depreciation load without being charged imaginary mileage.
One person drives long distances; another only does city errands: FAVR‑style helps here. The highway driver likely eats more tires and maintenance; the city driver “uses up” days of availability. Let each bucket speak.
A sharp insurance jump: If your policy reprices mid‑term, reset your fixed allocation. Consider whether UBI could align premiums closer to your actual miles. Document the change so no one forgets why the numbers moved.
New car vs. older car: If you started sharing in a previous year, use AAA’s “Your Driving Costs” from that time as a baseline, then adjust annually. If you’re adding a newer or different powertrain, run a model‑specific TCO for that vehicle so your per‑mile rate reflects the real depreciation curve.
Carpooling with rotating drivers: Use a neutral carpool calculator to set a baseline per‑mile estimate everyone understands, then layer in your household’s specifics if needed.

A Quick Map for Your First Conversation

If you’re staring at a blank page and a full calendar, try this script:

What’s our default method—per‑mile, FAVR‑style, or model‑specific TCO? Why that one?
How will we document miles? Odometer photos, app logs, or UBI data?
When will we revisit? Renewal, mid‑term repricing, or annually?
How will we handle EV vs. gas miles if both happen in our world?
What’s our “we disagree” plan? (Usually: pause, check the calculator or TCO references, adjust next month or quarter.)

This isn’t about catching each other out. It’s about designing a system that respects both the car and the people sharing it.

Takeaways You Can Adapt

Pick the simplest method that will survive your real life. The IRS 70¢/mile rate is a solid all‑in default when you need speed and fairness.
When usage diverges, separate fixed from variable. Allocate insurance/registration/depreciation by share of miles or access, and fuel/maintenance/tires by actual miles.
Treat depreciation as real cash. Use AAA or Edmunds TCO to avoid under‑ or over‑charging, especially with EVs or luxury segments.
Expect premiums to move. Split insurance transparently (miles, driver factors), consider UBI if it fits, and revisit at renewal or repricing.
Sanity‑check with public calculators and transparent methodologies (AAA, DOE AFDC). They make conversations less personal and more factual.

Closing

Fairness isn’t a spreadsheet; it’s a shared understanding. The more your split reflects how the car is actually used—and the more you ground it in transparent, neutral references—the less energy you spend renegotiating every month. Choose a method that fits your season, then let the math support the relationship, not strain it.

How to Split Car Costs Fairly: Fuel, Repairs, Insurance, and Depreciation

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