The Cost of Driving

In my last post I mentioned the cost of driving.  The reason that this is important is because I believe that very few people take the time to think about what is involved with everyday trips.  I drove to the bank the other day and had to park at a meter.  At first, I was a little ticked off that I had to pay 35 cents in order to park for a couple minutes to deposit some checks.  Then I realized that I hap probably spent more than that in gas money to go to the bank.  That was money that I spent every time I drove and rarely ever thought about. 

On a 25 mile trip to school, I would pass through a $1 worth of tolls.  My car gets 25 miles to the gallon.  Gas costs $3.50.  So for that trip, I would pay 3.5 times the money of the tolls in gas, but would only be upset about the $1 in tolls.  And that only counts gas money.

Here are my calculations on how much it costs to drive a new car over its life:
I buy a $20,000 car and expect it to last 10 years and 150,000 miles (I do not drive that much, but it makes easy math...and some people do drive that much).  The car gets 30 miles to the gallon and will need $5,000 in maintenance over the 10 years it lasts (oil changes, repairs, new tires, realignment, etc.).  Insurance for the car costs $500 every six months.  The total cost for that car is $20,000 + $5,000 + $10,000 = $35,000.  The cost per mile just to own and keep up the car is $35,000/150,000 = 23.3 cents a mile.  Gas is $3.50 a gallon and the car gets 30 miles a gallon.  That is $3.50/30 = 11.6 cents a mile.  That adds up to 34 cents a mile. 

When my then girlfriend (now wife) was looking for a new apartment, I convinced her that it would be beneficial to move downtown and close to work.  Previously she was driving 30 miles a day every day.  In a typical 30 day month, that was 900 miles.  At 34 cents a mile, that equals $306 dollars a month.  Granted, not all of that money is saved.  If you own a car you will still pay insurance and the purchase price of the car.  To simplify, you can really just do the simple math by looking only at gas.  Still, looking at gas only, my wife would save $104 dollars a month.  In a year that is $1248.  Plus there is the added bonus of the car lasting longer and the cost of insurance likely being lessened.

I knew someone that drove 30 miles to work a nearly minimum wage job.  I think he made $8.50 an hour.  In a month, to go those 60 miles he would spend $7 in gas alone.  That is 49 minutes worth of work that was spent paying for his travel to and from work.  If he worked only 8 hour shifts, then 10% of all the money he made at that job would go to transportation to that job.  Alternatively, if he had a job that he could walk to that paid him $7.65 an hour he would have broken even...and saved himself the time it took to drive 60 miles.

To sum up...driving costs money.  If you have to go somewhere, then think about the cost of getting there.  It probably wont keep you from travelling, but it can have a big impact if it you are considering where to live and what route to take to work (avoiding tolls can be costly).

- Jon