Yes — but not through the deduction, which is the part most drivers assume. If you claim the standard mileage rate in the United States or the approved mileage allowance in the United Kingdom, the amount you can deduct per business mile is the same whether you drive a fifteen-year-old hatchback or a new estate. What changes is what that mile costs you in reality. The gap between the fixed deduction and your actual cost per mile is where a delivery driver’s profit lives, and it is almost entirely a function of the vehicle.
What is cost per mile, and how do I work out mine?
It is every pound or dollar the vehicle costs you in a year divided by every mile it covers in that year, and it is the only vehicle number worth knowing. Drivers tend to think about fuel because fuel is the cost you physically pay for, at a pump, several times a week. Fuel is rarely the largest item. Depreciation usually is, followed by insurance, and both of them are invisible in the sense that no one hands you a receipt for them on a Tuesday.
Work it out annually and honestly, from the whole list. The result is a single figure you can compare directly against what you earn per mile and against the mileage deduction you will claim — three numbers on the same scale, which is a far more useful view than a fuel spend you feel bad about.
- Fuel or charging, at what you actually pay rather than the best price you have ever seen
- Insurance, which for delivery or private hire use is its own category and its own conversation with a broker
- Servicing, tyres, brakes and the consumables that a high-mileage year eats faster
- Depreciation: what the vehicle is worth now against what it was worth a year ago
- Finance or lease payments, and the excess-mileage terms if you are on a contract
- Road tax and the MOT in the UK, registration and inspection in the US, plus any congestion or clean-air charges
Why is the mileage deduction the same whatever I drive?
Because the standard rate is a national average, not a measurement of your car — it is designed to bundle fuel, maintenance, insurance and depreciation into one per-distance figure for everybody. That design has a blunt consequence. Drive something cheap to run and the fixed deduction can exceed what the mile actually cost you, and the difference is real money you keep. Drive something expensive to run and the same fixed deduction under-recovers your true cost, every mile, all year.
This is the argument for the alternative method, and it is a genuine trade rather than a trick. Both systems offer one: the United States has the actual expense method, where you deduct real vehicle costs apportioned to business use and depreciate the vehicle; the United Kingdom has actual running costs with capital allowances instead of the simplified AMAP route. Both demand much more record-keeping, and both carry rules about when you may switch and whether the choice is locked to a particular vehicle once made — HMRC and the IRS each publish their own conditions, and they are worth reading before you buy rather than after. Whichever method you land on, the mileage log is the foundation: one multiplies it by a rate, the other uses it to prove the business proportion.
Petrol, diesel or electric on a delivery duty cycle?
Delivery is the harshest duty cycle a car can have, and it changes the usual answers. The job is short trips, constant stopping, low average speeds, long idles outside restaurants and an engine that frequently never reaches full operating temperature. Motorway economy figures — the ones that sell cars — describe almost none of your driving.
Diesel is the classic mistake for urban delivery: the particulate filter needs sustained higher-speed running to regenerate, and a car that only ever does short stop-start town work can end up in a cycle of warnings and workshop visits. Petrol hybrids suit the pattern well, because the duty cycle is exactly where the electric side does its best work. Fully electric fits the same shape even better — regenerative braking recovers energy from the constant stopping, there is no cold-start penalty, and servicing is lighter — but it turns the question into charging: whether you can charge at home, what public charging costs where you work, and how much of your shift you are willing to spend stationary. Model the charging, not just the miles.
What does depreciation do to a car covering far above average distance?
It accelerates, and it is usually the largest single cost of delivery driving. A full-time driver can cover in one year what an average private motorist covers in three or four, and the vehicle’s value falls accordingly — mileage is one of the first things any valuation tool asks for. Every service interval arrives sooner, the warranty runs out in calendar time as normal but in distance terms almost immediately, and the tyres and brakes that a private owner replaces occasionally become a recurring line item.
This is the strongest argument against buying an expensive car for this work, and it has nothing to do with taste. An expensive vehicle depreciates in larger absolute amounts, costs more to insure for delivery or private hire use, and costs more for every consumable — while earning exactly the same per mile as a cheap one and attracting exactly the same fixed mileage deduction. Buying used, at the point where the steepest part of the depreciation curve has already been absorbed by someone else, is the single biggest lever most drivers have on their cost per mile.
Does the same logic apply to a bike, a scooter or a van?
The arithmetic is identical; only the inputs move. A bike or e-bike has a cost per mile low enough that the fixed deduction rules change shape entirely — both the IRS and HMRC treat bicycles and motorcycles differently from cars, with their own rates and their own conditions, so check which category your vehicle falls into before assuming the car rate applies. What a bike loses is range, weather tolerance and load, which is why it wins in dense city centres and loses everywhere else.
Vans are the mirror image: higher fuel, higher insurance, higher tyre and servicing costs, and a duty cycle that only pays for itself if the work genuinely needs the volume — parcel rounds, multi-drop, larger grocery runs. Running a van for restaurant delivery is paying for capacity you never use. In every case the test is the same: what does a mile cost in this vehicle, and what does a mile earn in the work I actually do?
So what is the right vehicle?
The cheapest one per mile that does your work reliably, insured correctly for it, and bought where someone else has already paid the depreciation. That is an unromantic answer and it is the one the numbers keep producing. Reliability belongs in it explicitly, because a day off the road earns nothing and a delivery car that is in the workshop is a delivery car costing you both ends.
The only way to know your own figure is to record the costs and the distance in the same place for a year, which makes the calculation a by-product rather than a project. BrewGig keeps vehicle expenses and automatic mileage against the same vehicle, so cost per mile is something you can read rather than reconstruct. BrewGig is an independent product and is not affiliated with, endorsed by or partnered with any delivery or rideshare platform; all platform names mentioned here are the trademarks of their respective owners.