How to calculate vehicle depreciation for reimbursement
Understand how vehicle depreciation affects mileage reimbursement rates.
Depreciation is an essential component in calculating fair mileage reimbursement rates.
Vehicles lose value over time and use. On average, a car loses 15-20% of value in the first year and about 10-15% annually thereafter. High mileage accelerates this depreciation.
To calculate per-kilometer depreciation, divide expected annual value loss by the number of kilometers you plan to drive. For example: R$ 60,000 car with R$ 9,000/year depreciation and 20,000 km/year = R$ 0.45 per km in depreciation alone.
Add to that fuel, maintenance, insurance, and tax costs to arrive at total reimbursement rate. Serious companies consider all these factors when establishing policies.
Conduct annual rate review, adjusting according to fleet average age and market costs. Outdated rates harm both company (overpaying) and employee (underpaid).