Where does actual expenses beat the standard mileage rate?

The data this page uses

Rather than re-deriving vehicle cost data, this page uses the figures already verified on what does a mile actually cost you to drive?: AAA's Your Driving Costs (2025 edition) puts the all-in cost of owning and operating a new vehicle at roughly 99.95¢ per mile at 10,000 miles/year, 77.18¢ at 15,000 miles/year, and 66.10¢ at 20,000 miles/year. The same total annual cost is simply being divided across more or fewer miles.

Against that, the 2026 IRS standard mileage rate is 72.5¢ per mile for miles driven January 1 – June 30, 2026, and 76¢ per mile for miles driven July 1 – December 31, 2026 — set by Notice 2026-10 (IR-2025-128) and revised by Announcement 2026-11 (IRB 2026-29). See the full split-year rate explainer for how to apply both halves. For a full-year comparison here, a blended rate of roughly 74.25¢ (the simple average of the two halves) is close enough to show the shape of the crossover.

Why depreciation is the variable doing the work

Fuel and maintenance scale roughly with miles driven — drive more, pay more, in a fairly direct line. Depreciation, insurance, registration, and any loan or lease payment don't work that way: a financed new car loses a large chunk of value and costs the same insurance premium whether it's driven 6,000 miles or 22,000 miles that year. That fixed chunk, divided by miles driven, is what makes cost-per-mile fall as annual mileage rises — and it's why low-mileage driving in a newer, financed vehicle is the scenario where actual expenses has real room to beat a flat per-mile rate.

A worked example at both ends

Same hypothetical new vehicle, two different amounts of business driving in the same year, using AAA's published cost-per-mile at each mileage tier and the blended 74.25¢ 2026 IRS rate:

At 10,000 miles, this hypothetical driver's real costs run well above the flat rate — actual expenses captures more of what the vehicle genuinely costs. At 20,000 miles, the same vehicle's per-mile cost has dropped low enough that the flat IRS rate pays more than the vehicle actually cost that year — standard mileage wins, and it's far less paperwork besides.

The catch: this example is a new vehicle

AAA's figures describe a new vehicle with financing, full insurance, and steep early depreciation. Most gig drivers run older, paid-off cars — and as already noted on the cost-per-mile page, "an older paid-off car has far less depreciation and no finance charge, and its true cost per mile can be substantially lower — though maintenance rises." For that kind of vehicle, actual cost per mile is typically lower at every mileage level than these new-car figures show, which pushes the crossover point down — standard mileage tends to win at lower annual mileage than the table above suggests, for a typical paid-off gig vehicle.

That's exactly why this page can show the shape of the crossover but not a single number that applies to you: run your own cost per mile using the method on the real cost-per-mile page, multiply by your actual annual business miles for both methods, and compare — before you make a choice you may not be able to undo. See standard mileage vs. actual expenses for exactly what locks you in and when.