# Fixed and variable rate (FAVR)

> Reimbursement model combining a fixed monthly payment with a variable per-km rate.

**URL:** https://quilometragem.com/glossary/fixed-and-variable-rate

**Summary:** 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.

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.