The Standard Vehicle in a FAVR (Fixed and Variable Rate) program is not meant to represent your exact personal vehicle. Instead, it serves as a benchmark vehicle selected to fairly and consistently calculate mileage reimbursement rates for all program participants.

Here’s why:

  • Equity & Consistency: Everyone in the program is reimbursed based on the same Standard Vehicle, which ensures fairness across employees, regardless of what they personally drive.

  • IRS Compliance: The IRS requires that a Standard Vehicle be chosen to reflect a reasonable, mid-range car that employees in a similar role might typically use for business. This ensures reimbursements are compliant and defensible.

  • Cost Alignment: The Standard Vehicle is chosen to balance operating costs (fuel, maintenance, insurance, depreciation, etc.) in a way that reflects average driving expenses, not luxury or unusually low-cost vehicles.

Example:
If the Standard Vehicle for the program is a Toyota Camry, but you personally drive a Ford F-150 pickup truck or a Honda Civic, your reimbursement will still be based on the Camry. This doesn’t mean your vehicle is “wrong” for the program—it simply ensures that everyone is measured against the same baseline, keeping reimbursements fair, consistent, and IRS-compliant.

Key Takeaway

The Standard Vehicle is a baseline, not your personal car—it’s used to make reimbursement fair, consistent, and IRS-compliant for everyone.