Atlanta Outdoor Club

benjt wrote:. The trip leader needs to take charge and establish what will happen on each of his/her trips, including carpool costs.

I agree that now that trip leaders may want to take a more active role in this process....Passengers in the vehicle should know beforehand how much a ride will cost them, and the drivers should know how much to expect as well.

Then making sure that people are distributed evenly between the vehicles...you don't want five people in one car and two people in another...that's just not fair even if a big group wants to ride together because they are friends.

When people ride with me, I would probably use about .35 per mile to determine out my cost, but I can see why others would ask for more or less than that. I'd be more comfortable with something a bit lower than the .50 being used on the website, but of course there is no perfect number that is going to work for everyone.

I think it is important to remember that the carpool drivers are driving on a volunteer basis for a recreational activity, and one they/we would have driven to anyway in most cases. If we are going to use an IRS rate as our guideline, there are other mileage rates set out by the IRS aside from the business rate.

Here is the full article regarding these rates for those who are interested:

November 28, 2007
IRS Raises Mileage Rate for 2008
The standard mileage reimbursement rate for employees who use their own cars for business purposes will rise from 48.5 cents per mile in 2007 to 50.5 cents per mile in 2008, the Internal Revenue Service announced.

Each year, the IRS issues standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Employers who use the IRS standard mileage rate to reimburse employees may deduct the reimbursement as a business expense. If employers use the approved rate (or a lower rate), the IRS considers that requirements to substantiate and adequately account for the expense are satisfied without extensive documentation of actual expenses.

Beginning January 1, 2008, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be:

50.5 cents per mile for business miles driven;
19 cents per mile driven for medical or moving purposes; and
14 cents per mile driven in service of charitable organizations.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile.

The IRS noted that a taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS), after claiming a Section 179 deduction for that vehicle, for any vehicle used for hire or for more than four vehicles used simultaneously.

Quoted from above:

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile.

I agree with the .50 cent fuel price. The driver usually pays the most out of pocket for the carpool expenses. They are willing to drive their vehicle, therefore the fuel cost should always work out in their favor.

Fuel prices vary by up to .20 cents per week. Car prices and maintenance costs vary by a much larger amount. If you want to ride with someone else then you should be willing to pay for it.

I am an auto technician and fix my own car. Does that mean if people carpool with me that they shouldn't have to pay for the mileage cost difference between my car and Joes car? No. If the driver is driving a Mercedes, BMW, or a Pinto, the mileage should be at a set rate. .50 is a fair price no matter what the vehicle.

Pete

I did a little research on the different categories that go into the IRS mileage calculation. Couldn't really find much information on how many cents go to depreciation, fuel, maintenance, etc. But I did find some percentages on Cars.com (sorry Jason ). Look at the information and let me know what you guys think. I know these are still very generic numbers and all cars will be a bit different, but this should get us in the ballpark. I personally don't think opportunity costs and insurance cost should be included for our mileage calculations. Probably no financing costs and fees & taxes either. But then again, those are real costs, so lets discuss it.

____________________________OPTION 1___OPTION 2___OPTION 3
Cost Categories.....% by Cars.com...Cents/Mile...Cents/Mile...Cents/Mile
Depreciation..............31%.....................15.7........15.7...........15.7
Fees & Taxes...............3%......................1.5.............x.............1.5
Financing.....................8%......................4.0.............x............4.0
Insurance..................14%......................7.1.............x..............x
Fuel...........................29%.....................14.7........14.7...........14.7
Maintenance................5%......................2.5...........2.5.............2.5
Opportunity Cost..........8%.....................4.0..............x..............x
Repairs.......................2%......................1.0...........1.0.............1.0
TOTAL......................100%...................50.5.........33.9............39.4

Hilke wrote: I personally don't think opportunity costs and insurance cost should be included for our mileage calculations. Probably no financing costs and fees & taxes either. But then again, those are real costs, so lets discuss it..

Well I agree that fixed costs like insurance and taxes should not enter into the equation. If you leave your car parked in the driveway, those costs are going to be the same as if you drive it cross country.

The whole point here is the real cost to the driver for trip of a specific trip....and those costs are gasoline, maintenance/repairs, and depreciation (on a per mile basis).

Hilke showed this to me last night and I say I agree that not all the costs should be charged when carpooling.
I would leave out opportunity costs, insurance costs, and fees & taxes. I'm kind of up in the air about financing costs. They are part of the overall cost of the vehicle.
So that would put it somewhere between 34 & 38 cents / mile (I rounded) if we go this route.

Any other comments on these new numbers?

That range of around 34 to 38 cents per mile sounds good to me. And of course you can always tweak it in the future if fuel prices make another big surge upwards or if they pull back significantly (wishful thinking).

I would lean towards including the hypothetical financing costs in there, because they are part of the cost of the vehicle just as you say.

The 50.5 is the MAX allowed by a business for tax deductible purposes; they can pay you more or less.

I've worked at places that pay the MAX and I've been reimbursed by a charity for $0.19, so it depends on the organization.

The simple fact of the matter is it does cost a lot to own a vehicle. Heck, it may be cheaper to rent a van and split the costs for a long trip. I've done it before!

I've also been given $1 by a cheap-o and handed it back to the member. At a minimum, I expect a beer tab from everyone!

"Tom, the 50 cents per mile is the BUSINESS mileage rate with the IRS. The recreation mileage rate is significantly lower. This is NOT business mileage and treating it as such is ridiculous."

It may have been a business rate; but considering the rising costs of fuel...

heard today it could go up another .75 by Memorial Day...

I don't see drivers making a profit; soon it won't be enough!

$0.34- $0.38 is more reasonable. It's still almost double the IRS max for non-business travel, but it's somewhere in the middle. The $0.34 figure should be used in this case, as it is the only one that does not factor in fixed expenses which the driver would be paying anyway. Sorry guys, but here's why:

The costs outside of fuel, depreciation and maintenance are not really reasonable to request from someone you are driving to a hike. My insurance, financing, taxes and other such costs are my own, which I would be paying whether or not I drove 3 other people to some mountain. They are just not related to what we are doing here. What they are relevant to is tax writeoffs for people who use their vehicle as a company vehicle. That is why the IRS provides different rates for different activities.

If you think gas is more expensive than this rate, a carpool driver has the option of splitting the gas costs. In fact, what most of us do is keep track of what we spend on gas and ask for a percentage of that. No driver is going to get ripped off here if the gas prices go up again. It is your own decision which option to use.

Hilke, thanks for the formula.

millon228 wrote:$0.34- $0.38 is more reasonable. It's still almost double the IRS max for non-business travel, but it's somewhere in the middle. The $0.34 figure should be used in this case

I "vote" for .38. That would leave some room for a rise in gas prices and some people have more expensive vehicles anyway. As I said, I personally plan to use .35 when I drive, but .38 would work better for website purposes.

I agree with Tony. I think for posting purposes the .38 amount would work. Mine will be less because I'm going to drive my car into the ground before I buy a new one. I'll probably charge .333 per mile just because I can take the mileage driven and divide by 3, and that's close enough for me. Then I don't have to strain my brain too much with all those calcs.

OK, it's been changed to 38 cents. This seems to be the majority opinion.

i know i'm late to the party here, but i'm going to throw in for $0.36. it splits the difference (yet again), and isn't nearly as extreme as $0.50.

i'm also going to have to vote against any current or future inclusion of finance rates.