Reimbursement & Payment
Reimbursement model combining a fixed monthly payment with a variable per-km rate.
The FAVR (Fixed and Variable Rate) model pairs a fixed monthly payment — covering distance-independent costs (insurance, depreciation, fees) — with a per-km variable rate — covering distance-dependent costs (fuel, tires, maintenance). Common in large US fleets, calibrated by region. Fairer than a flat per-km rate because it mirrors the actual vehicle cost structure.