7 min · 2026-07-02

FAVR: Fixed and Variable Rate Reimbursement Definition

FAVR (Fixed and Variable Rate) vehicle reimbursement combines a monthly fixed amount with a per-mile variable rate based on local costs — for high-mileage field fleets.

Definition

FAVR reimburses vehicle costs using:

**Fixed** monthly component (insurance, depreciation, registration)
**Variable** per-mile component (fuel, maintenance)

Requires periodic cost studies to remain compliant.

What is FAVR? · [Car allowance vs mileage](/resources/car-allowance-vs-mileage-reimbursement-guide/)

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