Why the cost of driving to work varies so much — and why it matters when comparing commutes

How much does it cost to drive to work?

It sounds like a simple question.

But two employees can live the same distance from the same workplace, drive to work on exactly the same days and still face very different commuting costs.

The latest HMRC Advisory Fuel Rates provide a useful illustration.

From 1 September 2026, the rates include:

Fully electric car (home charging) - 7p per mile

Petrol – up to 1,400cc - 14p per mile

Diesel – up to 1,600cc - 15p per mile

Petrol – 1,401cc to 2,000cc - 17p per mile

Diesel – 1,601cc to 2,000cc - 16p per mile

Diesel – over 2,000cc - 22p per mile

Petrol – over 2,000cc - 27p per mile

That means the fuel or energy cost per mile at the top of that range is almost four times the lowest rate.

For anyone trying to compare the cost of driving with cycling, public transport, car sharing or another way of getting to work, that difference matters.

The same commute can have very different fuel costs

Take two employees who each live 10 miles from work.

Both commute three days a week.

Allowing for 46 working weeks in a year, each travels approximately 2,760 commuting miles.

Using the latest HMRC rates:

• At 7p per mile, the estimated annual energy cost would be around £193.

• At 27p per mile, the estimated annual fuel cost would be around £745.

That is a difference of more than £550 a year, despite the employees travelling exactly the same distance to exactly the same workplace.

And that is before considering parking.

So simply recording that both employees commute by “car” misses an important part of the picture.

It also changes how other options compare.

A bus or rail fare might look relatively expensive compared with the fuel cost of one employee's commute, but much more competitive for another.

Likewise, the financial benefit of cycling, walking or car sharing can vary considerably depending on the vehicle being replaced.

But fuel is only part of the cost of driving

There is another important complication.

The total cost of owning and using a car is much greater than the fuel used getting to work.

Depending on the vehicle, costs can include:

• Finance payments or depreciation.

• Insurance.

• Servicing and maintenance.

• Vehicle Excise Duty.

• Fuel or electricity.

• Workplace parking.

If somebody owns a car primarily because they need it to commute, all of those costs can be relevant when comparing their car with an alternative.

The same may be true for a household that keeps a second car largely because two people need to travel to different workplaces.

If changing the commute means that vehicle is no longer required, avoiding the full cost of car ownership becomes a realistic possibility.

But that will not be true for everybody.

“I'd still own the car anyway”

This is a perfectly reasonable response to some commute cost comparisons.

Many people use their car for far more than travelling to work.

They may use it for:

• Shopping.

• Family journeys.

• Weekends away.

• Visiting friends and relatives.

• Taking children to activities.

• Other personal journeys.

If they started cycling to work or bought a monthly bus ticket, they might still keep exactly the same car.

Their insurance would still need to be paid.

Their finance agreement would not suddenly disappear.

The car would still depreciate.

They would still need to service and maintain it.

So presenting the full annual cost of their car as a saving from changing their commute could be misleading.

That is why it is useful to distinguish between the total cost of car ownership and the costs more directly associated with making the commute.

Which costs could actually be avoided?

For somebody who plans to keep their car regardless of how they commute, the most immediately relevant savings are often the variable costs.

In particular:

Fuel or electricity

If the car is not being driven to work, the energy required for those miles is no longer being purchased.

Parking

If the employee pays to park when they drive to work, that cost may also disappear on days when they travel another way.

Those are much more direct comparisons.

Imagine someone considering cycling to work twice a week.

They may still have exactly the same insurance, servicing and finance costs at the end of the year.

But they will use less fuel and, if they currently pay for parking, may avoid that cost too.

Likewise, somebody considering a relatively inexpensive monthly bus ticket may want to compare the cost of that ticket primarily with the fuel and parking they would no longer pay, rather than assume the whole cost of their car disappears.

That gives them a much fairer basis for making the decision.

There are therefore two useful cost comparisons

When looking at the cost of a car commute, it can be helpful to answer two separate questions.

1. What does this commute cost when the wider cost of owning the car is included?

This provides a fuller picture of what driving costs the employee.

It can be particularly relevant where the vehicle exists primarily because of the commute, or where changing travel behaviour could allow a household to save the expense of a second vehicle.

2. What costs would actually change if the employee travelled differently?

For somebody who will continue to own their car, fuel and parking may be much more important when deciding whether an alternative commute makes financial sense.

Neither comparison is inherently right or wrong.

They answer different questions.

The important thing is to avoid presenting one figure as though it applies equally to every employee.

Vehicle type matters to what would actually change if the employee travelled differently

This brings us back to the latest HMRC rates.

Even after separating fixed and variable costs, it would still be misleading to assume that every car commute has the same fuel cost.

A 20-mile daily commute in a large petrol car does not cost the same in fuel as the same journey in a small petrol car or an electric vehicle.

From 1 September, HMRC's rates range from 7p per mile for a fully electric car charged at home to 27p per mile for a petrol car over 2,000cc.

HMRC publishes the rates for company-car mileage purposes, but the underlying figures provide a consistent and regularly updated basis for estimating the fuel or energy cost associated with different vehicle types in CalCommuter.

For fully electric vehicles, HMRC now publishes separate home and public charging rates. CalCommuter currently uses the 7p-per-mile home-charging rate, rather than asking employees additional questions about their individual charging mix.

The objective is not to produce an exact household accounting exercise.

It is to provide a useful, consistent and transparent commute comparison without making the employee survey unnecessarily complicated.

Why this matters when showing employees alternatives

Cost can be one of the most tangible differences between commuting options.

But if the starting figure is unrealistic, the comparison quickly becomes less useful.

Telling an employee that another commute could save thousands of pounds because it removes every cost associated with their car may not resonate if they know perfectly well that they are keeping the car.

Equally, applying one generic fuel cost to every driver ignores significant differences between vehicles.

A more useful comparison is transparent about what is being included.

For example:

Your total estimated car cost

This gives the wider picture of the costs associated with owning and using the vehicle.

Then separately:

Fuel cost for your commute

Parking cost for your commute

Those figures allow the employee to interpret the comparison in the context of their own circumstances.

Someone considering getting rid of a second car may place significant weight on the full ownership cost.

Someone who intends to keep their car regardless may focus much more heavily on fuel and parking.

This is how we approach commute costs in CalCommuter

CalCommuter calculates and presents the wider cost of car ownership as part of an employee's tailored commute plan.

But we also break that cost down.

That distinction is deliberate.

For an employee who bought a car specifically to get to work — or a household maintaining a second car largely because of commuting — the full cost can be highly relevant.

For somebody who uses their car extensively outside work and intends to keep it, the variable costs associated with the commute may be the more useful comparison.

Fuel is therefore shown separately, alongside parking where applicable.

And rather than applying the same fuel assumption to every driver, the calculation reflects the type of vehicle being used.

The underlying HMRC Advisory Fuel Rates are reviewed quarterly, on 1st March, 1st June, 1st September and 1st December, and we update the rates used within CalCommuter whenever they change.

Good comparisons need to reflect real choices

There is no single figure that answers the question:

“How much could I save by travelling to work differently?”

It depends on:

• What somebody currently drives.

• How far and how often they commute.

• Whether they pay for parking.

• What the alternative costs.

• Whether they would continue to own the car anyway.

• Or whether changing how they commute could allow them to avoid the cost of a vehicle altogether.

The latest HMRC rates are a useful reminder of just how much the first of those variables alone can matter.

At 7p versus 27p per mile, even the fuel component of two otherwise identical car commutes can be very different.

So when comparing commuting options, the goal should not be to produce the biggest possible saving.

It should be to produce a comparison the employee can recognise as fair.

That means considering the vehicle they actually use, separating fixed and variable costs, and being clear about which costs changing their commute could genuinely help them avoid.