Charging for mileage?

Do you charge for mileage. I put together a little spreadsheet to see what it costs to drive to an inspection. Was I surprised. You can download the Excel file here: https://larryinspects.com/TravelCost.xlsx . You can change all the variables in the green column to fit your situation.
MileageCost

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That is cool that you created this and made it available to the rest of us.

Where the heck do you live that insurance is $3300/year? I have 6 vehicles and two teen drivers. Three of the vehicles have full coverage and are used for business and personal, the other 3 have just liability, and I pay less than $2k a year total.

Also, find a cheaper oil change place, lol!

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Thats nothing… I have 4 vehicles, two teen drivers, and I am paying $975 a month!!
I have tried finding cheaper rates here, and everyone else is more expensive. Its crazy.
My 18 yr old son has an 03 elantra, we only have liability on it, and his is almost $300/ month just for that piece of crap!! (the car, not my son) :laughing:
His record is clean too.

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Wow, that is crazy. My oldest lives in Colorado and I know their insurance is more expensive, probably because there are more slippery roads? I don’t know.

I guess I have it good in MN but we pay more in taxes than many other states so in the end it’s a wash anyway I suppose.

I switch our insurance back and forth between Progressive and Geico on average every 18-24 months or so. They give a big discount to switch and then slowly raise it, then I switch back to the other, rinse, and repeat. Kinda like our satellite TV service.

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We moved to Tampa area from Denver, and the rates are more here than they were in CO. Our homeowners policies are all going up here too. Most homeowners here have had their policies double in the past year. 18 months ago I was paying about $1300, now I am at $2400, but my home is only 6 years old.
Did an insurance inspection yesterday for a client trying to get a cheaper rate, she had a 1500 sf ranch built in the 80’s, and her rate increased to almost $5k.

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Yeah, there are so many variables in the insurance marketplace. My home was built in 1901, I have 3 outbuildings covered, and I have a wood-burning stove rider. In addition, we are more than 7 miles from the nearest fire station, which plays a role in our insurance. My yearly premium is $1800.

But these cross-state comparison’s are typically not worth much I suppose. So many different risk factors and cost-of-replacement factors.

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These are just numbers that I threw into the spreadsheet. I’m really not sure how much the insurance with full coverage on a $40,000 or more truck would cost today or in the next 5 years. A full service oil change using full synthetic is about $70 here now. Who knows how much it will be in the future. The whole point of the spreadsheet is to play around with the numbers and see how big of a bite that mileage costs take out of your inspection fee.

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Absolutely!!

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Yeah, I love the spreadsheet. I’m a spreadsheet guy myself so appreciate the work and thought behind it.

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The cost of transportation should largely be built into your fees. People don’t want to be “nickel/dimed” for each mile you travel to their inspection. We do charge for jobs out of our metro area but do so “quietly” - as in we just quote the price and don’t explain the travel fee that’s built in. Fwiw, 100% of the travel fee goes to the inspector (who provides their own vehicle with my company setup). I often see inspectors get caught up with the cost of driving to an inspection 40 miles away and complaining about the total cost. What they forget is with every job they are expecting a +/- 25 mile commute so it’s really only 15 miles extra.

This comes up somewhat frequently in my company and I always tell the guys the same thing when they complain about a long drive. In 20+ years of running my company I’ve never once had an inspector call me and tell me how happy he was to have a job 2 miles from his house. Like so many other things in this business it all average out in the end. Don’t get caught chasing dimes while missing dollars.

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When I look at that chart I feel blessed all my work is 10 minutes away. Truck paid off, insurance is 1/4 of OP. I have to take my hat off you’re making it work at $50/hr wage.

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I am impressed with this TABLE. I wasn’t able to open the Excel file, but I have some feedback and a bit of an open question to the blog. Charging for Millage? My HI Lead Instructor and Mentor explained to us in class that charging for millage could be detrimental since other HIs could be in better range of the target property and not charge for the commute. What translates into ‘pricing yourself out of the market’. He explained, If you are LOCKED into that Realtor or Client and there is no competition and they are totally loyal to your service quality… You may get away with an additional charge for the commute. But in most cases, if there is another HI available in the area, the Realtors will not hesitate to live you out of that deal. Pricing is a very complex issue in all service business. Some HIs tell me they charge more if get paid with a credit card. I think all of the above (Milage, Payment Method, etc.) should be transparent to the ‘customer/client’ (Realtor, Owner, Buyer, Investor, or else). If you through in the cost of the software licensing per report generated, the State Real Property Annual Taxes, the IRS Schedule C impact on your Tax Return if you are a HI LLC… It gets very complex to determine if you are ‘braking-even’ or taking a loss in your business P&L. My best honest recommendation will be to ‘spread out’ an estimated cost structure among the average number of inspections you expect to execute in a year and take a quarterly look at your P&L to adjust for seasonal market impact. Then you come out with a ‘minimum ticket price’ for one job and have some customers subsidize others. You may take a specific job on a loss, but that Realtor may generate many other deals during the year. Take the example of a grocery store: The milk is always sold at a loss, but is located way on the left back corner of the store and no one walks away with just the milk on one visit. Bread and Butter are in the opposite back corner of the store too. They drive/force you to walk the whole store to make up for the break even sale of bread and milk. Ah! we haven’t even add the cost of marketing activities to our cost structure…! Comments?

Hay! Larry… I couldn’t open the EXCEL file with your link.
Could you email me the actual file, Please! [inspector@iinspectpro.com]
Thanks…!

Nice post Pedro, but Millage is what the lumber yard charges you for custom lumber sizes!

The farther you drive, the more money you are giving away. Essentially, you are price cutting to get the job. You are taking money out of your pocket to get the job. I charge one direction only and the first 20 miles are free. I’ll post the right Excel file as soon as I can get my work computer running again.

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Mileage allowance is down for 2021 thanks to Brandon.

Do you keep this to yourself, or mention milage fees and discounts to your potential client when giving them a quote?

This is definitely a nice chart but I think the total loss is a bit misleading. Unless you’re a remote worker, you’re commuting regardless, and an hour in the car is pretty reasonable. The vehicle wear and associated costs obviously adds up but the overhead in general in this business is very low. I think you would lose more in work by charging for mileage than just upping your fee. I don’t know about everyone else but if you need to calculate the mileage and do an algebra equation every time someone asks what you charge, you’re also losing a ton of time there and probably business.

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I figured it in to my proposal while on the phone with them. And it all worked out just fine.

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We do charge a mileage fee and it gets build into the price in our scheduling software. It is an expense that needs to be recouped. The way it works for us is our price goes up depending on the mileage and not just raising prices on a whim. We have our base and then the mileage fee gets added. We have worked with out accountants to figure out what we need to make a profit. Too many don’t even know what it costs them to back out of the driveway and do an inspection.

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