My employer reimburses me $0.45 per kilometer (km) when I use my car for company business. This turns out not to be a good deal for me with my expensive car, but it raises the possibility of augmenting your income by using your car for business. (Side note: It’s interesting that the word “mileage” has survived in a country that measures driving distances in km.)
I did a rough calculation of my car costs taking into account initial purchase price, insurance, repairs, gas, and inflation. It turns out that my average cost has been about $0.50 per km (in today’s dollars) to drive my car. So, I lose a nickel per km on business trips. I’m not overly concerned about this small loss because I don’t use my car for business much, but it could make a big difference for people who drive for work frequently.
For a trip to a city 500 km away, the round trip of 1000 km would leave me out of pocket about $50, but someone with a cheaper and more efficient car that costs only $0.25 per km would pocket $200 after costs. This may not seem like much compensation for all that driving, but if you have to drive that much for your job anyway, you might as well pocket some extra tax-free cash.
I’d be interested to hear whether any readers use this strategy to augment their incomes. Have you done any detailed calculations to see how much extra money you’re pulling in with mileage claims?