Author Topic: Car pool or mileage reimbursement?  (Read 7485 times)

PJ

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Car pool or mileage reimbursement?
« on: October 29, 2012, 11:57:54 AM »
Hi all, 

I haven't been able to give up my bedpan on wheels (i.e., my car) yet, but have been trying to figure out ways to reduce my driving.  Specifically, I challenged myself to go a whole month on a tank of gas this month, by walking for short trips, borrowing my sister's transit pass when she's not using it or swapping with her when she's got a shorter distance to go than me, etc.  I also have a conference/retreat to go to out of town for work next week, and as a friend had offered to drive me, I figured that was another way to get me to my goal. 
 
But then it occurred to me that I get mileage reimbursement if I take my own car, and I wondered if I would come out ahead financially with that approach.  Mileage reimbursement is 52 cents per km (I'm in Canada)  Gas prices have been really up and down over the last month or two, between $1.15 and 1.30 a litre approximately.  I have an old car, a 93 Grand Am (6 cylinder) so the fuel economy isn't great, but I've modified my driving habits to try to boost that at least a little.  Where the car costs me the most is in insurance, because I'm a new driver living in a supremely expensive zone.  I presume that mileage reimbursement is calculated to compensate people not just for the gas but for all the other expenses that come along with having a vehicle, so maybe I would be better off to drive to the conference and get the reimbursement to put toward those other costs. 

What do people think?  I would, of course, offer to drive the friend who was planning to drive me, because car pooling is the right thing to do, in terms of the environment!

Done by Forty

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Re: Car pool or mileage reimbursement?
« Reply #1 on: October 29, 2012, 03:29:38 PM »
Well, it depends on the math. 

Figure out how many km you drive a year:  X
Figure out your average maint costs in a year: Y
Figure out your average km per liter: A
Figure out the average cost of a liter: B (say, $1.23)


(Y/X)+(B/A) = your cost per km

If your cost per km is less than $0.52, take your car.  But, I'm presuming your friend will probably ask you for gas money, too...

My guess is that the best thing to do is to drive your car, drive conservatively, and maybe ask your friend to chip in a fair amount for gas...keeping the above calculations in mind.

Bakari

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Re: Car pool or mileage reimbursement?
« Reply #2 on: October 29, 2012, 04:35:04 PM »
If you drive your car, will your friend ride with you?
Regardless of cost, it seems silly for two cars to go the same far away place with one adult each in them.
If it turns out that your overall cost is more than the reimbursement, your passenger could make up the difference by chipping in a bit for gas - or, if it does, you could end up net positive ;)
In fact, why not offer to take 2 or 3 co-workers up with you?

PJ

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Re: Car pool or mileage reimbursement?
« Reply #3 on: October 29, 2012, 05:53:51 PM »
Thanks for the responses, both of you.  I absolutely suck at math, and don't know the actual numbers to substitute in the equation Done by Forty provided.  I've only had the car for a year and a half so "average" maintenance costs are a bit of a mystery.  My fuel gauge is not terribly accurate, it appears (for example, when I fill up the tank I get about 100 km before the needle comes down to the full line, but the last 1/4 tank of gas appears to evaporate overnight!)  And I've only been working to modify my driving for a couple of months, so I don't have any idea of how many mpg or km/l I'm actually getting.  In fact, the only thing I can say for sure is that I filled up the tank when it was $1.17 (approx) per litre.  I've heard people throw around a number that the IRS allows for mileage purposes - 50 cents or so?  What is that supposed to take into account?  I assume that my employers amount of 52 cents per km is intended to cover something similar (although there are of course differences between miles and km, and price of gas in Canada vs US). 
 
What I do know is that by far my biggest expense for the car is my insurance cost, and that is a relatively fixed cost regardless of how much I drive (of course insurance is impacted by amount that you drive, but this one trip out of the city isn't going to make a big difference.)  That's really what got me started thinking about being the one to drive - because if mileage reimbursement is supposed to help cover the cost of insurance and maintenance then I'd like to take advantage of that. 

In terms of car pooling with my friend and other co-workers, it's probably only realistic with my one friend who happens to live near me.  We are all clergy, each person working at separate churches, and mostly living near those churches.  That also means that we are each eligible for reimbursement, but none of us would submit if we weren't the one driving, or, so that no one church bears the cost for both people getting there, we would each submit for part of the trip and then hand the money off to the person who actually does the driving.  I agree it doesn't make sense for us to drive separately, which is why I would definitely either ride with her or drive her. 

I've sent the friend an e-mail letting her know what I'm thinking and asking if she'd be ok with me doing the driving.  As a bonus, I realized that this week we're both attending another event that's being held at the church where I work.  I don't get mileage reimbursement for going to my own location, so I've actually asked her if I can ride with her that day!  So regardless of what happens next week, that's 20+ km less that I'll drive this month :-) 

Self-employed-swami

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Re: Car pool or mileage reimbursement?
« Reply #4 on: October 29, 2012, 08:08:29 PM »
$0.52/km seems like a low reimbursement.  I get anywhere between $0.85 and $1.15 per km.

That being said, I know a friend who gets $0.48/km.

PJ

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Re: Car pool or mileage reimbursement?
« Reply #5 on: October 29, 2012, 08:48:54 PM »
$0.52/km seems like a low reimbursement.  I get anywhere between $0.85 and $1.15 per km.
 
Mmm ... yes, I'm not surprised.  It is the church, after all, so it's a non-profit - and I'm thinking that clergy don't go into the field for the great pay, fabulous working hours, and taxable benefits - although the non-taxable benefits are, IMO, pretty great ;-) 
 
That being said, I will try not to covet your $1.15/km reimbursement rate ...

Self-employed-swami

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Re: Car pool or mileage reimbursement?
« Reply #6 on: October 29, 2012, 09:19:16 PM »
:)  I am required to drive a truck though, so I get paid more for those increased costs.

I just looked at the CRA milage for 2011, and it was $0.52 as well. 


Bakari

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Re: Car pool or mileage reimbursement?
« Reply #7 on: October 30, 2012, 08:28:35 AM »
I've heard people throw around a number that the IRS allows for mileage purposes - 50 cents or so?  What is that supposed to take into account? 

52 cents per mile (83c/km),  I believe its supposed to cover fuel, maintenance, variable (per mile) costs, but not fixed cost (insurance, payments), for the average American car (driven by the average American).

To figure out your own mileage, you have to fill the tank to the top every time.  It isn't possible any other way - no gas gauge is that accurate.  You fill up, and write down the odometer reading and/or reset the trip meter to zero.  Then at your next fill up, note the miles driven and divide the distance by the amount of fuel (or divide the fuel by the distance, depending on if L/km or mpg makes more sense to you)
Only then can you multiply by the cost of fuel and figure out how much driving costs you per mile (fuel is by far the largest variable cost)

Posthumane

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Re: Car pool or mileage reimbursement?
« Reply #8 on: November 05, 2012, 10:36:51 AM »
Heh, actually Bakari you got the conversion backwards. 52c / mile = 32c / km. However, the CRA tax deduction limit that Canadian organizations get for reimbursing their employees is 52c / km canadian, so that's what most will pay (unless you happen to work for an oil company).

If you don't want to figure out your actual fuel consumption you can use and average number from Fuelly as an estimate. It seems a grand-am averages about 9.5L/100km, so you're looking at a fuel cost of $0.11/km. Other direct operating costs to take into account are oil changes (2-3 cents/km if you do them yourself), tires (about 1c/km), and misc maintenance of wear items (this one is variable and depends on the car, so say... 5c/km). Depreciation could be as much as 20 cents / km on a newer car, but will be very little on a car your age. There are fixed costs that you have to take into account when talking about car ownership in general such as insurance and registration, but they don't factor into per trip costs since you pay them anyway, regardless of whether you take this trip or not. I wrote a blog post a while back on this topic (see here).

Your best bet is to do what others have mentioned and drive there to get the reimbursement, but take your coworkers with you. Even better if you can get them to chip in a few bucks for gas on the way. :D

PJ

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Re: Car pool or mileage reimbursement?
« Reply #9 on: November 08, 2012, 05:26:59 PM »
Thanks Posthumane!  Appreciate the additional info about car costs. 
 
In the end, I got my co-worker to drive instead, because I need an engine mount replaced and the noise was getting worse, so thought it best to avoid a long drive to a rural location :-)  The repair will be done tomorrow.