FIXED COST EXAMPLE

Let’s say your insurance cost is $1,000 per month (FIXED COST).  This is a cost that you can calculate on the first day of the month.  Notice how your Cost Per Mile  or Cost Per Hour gets lower the more miles you drive or the more hours you operate your Motor Vehicle.

COST PER MILE EXAMPLES

Insurance Expense per month =        $1,000

Miles Traveled per month =                 1,000

Your Cost Per Mile for insurance is $1.00 per mile

Insurance Expense per month =        $1,000

Miles Traveled per month =               10,000

Your Cost Per Mile for insurance is $0.10 per mile

COST PER HOUR EXAMPLES

Insurance Expense per month =        $1,000

Operation Hours per month =                100

Your Cost Per Hour for insurance is $10.00 per hour

Insurance Expense per month =        $1,000

Operation Hours per month =                 230

Your Cost Per Hour for insurance is $4.35 per hour

It does not matter how many miles you drive or how many hours you operate your Motor Vehicle, you will pay your insurance company $1,000.  The cost is fixed!

IMPORTANT

Fixed cost does not mean that the expense is the same dollar amount each month but rather the dollar amount does not change based on miles driven or hours operated.

See our Fixed Cost- Calculators on this page.