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Cost of driving

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cold dead fingers
A strongly held opinion from a Washington car driver (1993).

The true cost of driving a car is usually estimated, as of 2012, at about $16 a day, plus an additional 20 cents or so per mile driven. At 15,000 miles per year, that comes out to $8,946 annually, or 59.6 cents per mile.

However, even as a measure of direct costs, this estimate is probably not accurate in Portland, because of higher parking costs and lower depreciation costs.

It also does not include the many indirect costs of driving, such as poorer health, or the costs of not driving, such as longer travel times.

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[edit] Complications

Your personal cost of driving and car ownership is not easy to calculate, in part because it's tied up with major life decisions such as where you live, where you work, what you do in your free time and who you like to spend time with.

For example, a major cost of driving to work in downtown Portland is parking. But businesses and the public provide drivers with free parking in most neighborhoods outside downtown. People who happen to work downtown therefore save much more money by avoiding driving than people who don't.

Similarly, average rent per square foot tends to be lower at apartments in Tualatin than in Portland. But if living comfortably in Tualatin requires car ownership while living in Portland does not, someone living in Portland may be paying about the same as the same person living in Tualatin.

[edit] AAA cost estimates

[edit] Current AAA estimate

Each year, American Automobile Association estimates the national average cost of car ownership. For 2012, AAA's figures for an average car are:

  • 19.64 cents per mile driven, including 14.17 cents for gasoline (assuming gas price of $3.36 per gallon and average mpg of 23.7 mpg), 4.44 cents for maintenance and 1 cent for tires. (At $4 per gallon and 20 mpg, the cost would be 20 cents for gasoline and 25.47 cents per mile driven; at $3 per gallon and 30 mpg, the cost would be 10 cents for gasoline and 15.47 cents per mile driven,)
  • An additional $6,000 per year (or $16 per day), including:
    • $1,001 for insurance
    • $610 for license, registration and taxes
    • $3,544 for depreciation (based on 15,000 miles annually) and
    • $846 for financing the purchase.

Assuming 15,000 miles driven annually, the sedan would cost $8,946 per year, or 59.6 cents per mile driven. At 10,000 miles driven annually (Portland-area residents drove only 6,825 miles per capita in 2008) the average car would cost $7,709 or 77.1 cents per mile, including reduced depreciation.

[edit] Historical AAA estimates

When AAA first began tracking driving costs, in 1950, the average cost was 9 cents per mile -- about 81 cents per mile in 2010 dollars. By this measure, then, the cost of driving has fallen about 26% since 1950.

[edit] Reasons the AAA estimate may be too high

Cars live longer in Portland. The Pacific Northwest climate is milder than most of the United States. AAA's depreciation figures, based on national averages, assume every vehicle is purchased new and then traded to a dealer after 5 years. Maintenance costs per mile are likely to be lower in the Portland area, too.

Insurance costs vary widely. AAA's sample commuter is "a married 47-year-old male with a good driving record, living in a small city and commuting three to 10 miles daily to work. The policy includes $100,000/$300,000 coverage with a $500 deductible for collision and a $100 deductible for comprehensive coverage." A November 2010 quote on Progressive.com put the cost for such a driver in northeast Portland at $916 annually, but a minimal insurance policy for the same driver would cost only $554 annually.

A second car costs less than the first. Insurance firms typically charge less for a second or third car than for the first, because they must only estimate the risk once. For consumers, the big insurance savings come from going car-free rather than just low-car.

Financing a new car is not necessary. The cost of the automobile itself can be greatly reduced by buying a low-priced used car with cash. However, this may increase repair costs, and does not substantially change the other costs or effects.

Alternative transportation costs are not included. As of 2012, an all-zone TriMet monthly pass is expected to cost $100, and bicycle maintenance, depreciation and anti-theft insurance also carry costs.

On his website DebunkingPortland.com, pro-car advocate Jim Karlock keeps a persuasive tally of reasons the AAA estimate is too high for Portland.

[edit] Reasons the AAA estimate may be too low

Parking is not included. Even if your employer offers free auto parking, a garage or other parking area adds to your home price.

Speeding and parking tickets are not included. One in six Americans receives a speeding ticket each year, according to TrafficTicketSecrets.com. In Oregon, the fine on a single class B traffic violation costs more than two months' worth of all-zone TriMet passes.

Crash expenses are not included. At 185 car crashes nationwide per 100 million miles driven, the average Portlander has (at 6,825 miles driven annually) an approximately 1.3 percent chance of an auto collision in any given year. This risk increases substantially for frequent drivers and those involved in drunken or distracted driving such as talking on a phone, texting or eating while driving.

[edit] Indirect costs

[edit] Personal costs

Travel time. Even in Portland, autos tend to save time on trips of more than a few miles. If that margin of time can be used more rewardingly than the time spent during non-car trips, a car is more efficient in terms of personal time. (On the other hand, as observed by Seattle Bike Blog, automobiles could be said to move more slowly than bicycles if you factor in the 512 extra hours the average car owner works each year to pay for his or her vehicle.)

Health benefits. The additional walking and biking exercise created during low-car commutes tends to create tangible and intangible health benefits, potentially lowering lifetime health care costs. One 2010 study, for example, found that light rail commuters were 81 percent less likely to become obese than other commuters.

Risk. Relying on an automobile for transportation introduces a major financial risk into your life. For the many auto owners who struggle to save ahead for future auto purchases or maintenance, the unexpected loss or breakdown of a car can mean lost wages, jobs or travel.

[edit] Society-wide costs

Environmental damage. Gasoline burned by automobiles contributes to the warming of the atmosphere, which is likely to damage agricultural land, reduce water supplies during dry months, and force people to relocate and do other expensive things. As of 2010, the estimated cost of a worldwide carbon tax would add an additional 11 cents per gallon of gasoline, or about 0.4 cents per mile driven by a car that gets 25 miles per gallon.

Roads, parking lots and garages devoted to autos also enlarge urban areas, destroying natural habitat, sending deadly runoff into rivers when it rains and further increasing the need to get around by automobile.

Land availability and cost. Parking spaces significantly outnumber cars, and drastically outnumber families. Roads and parking facilities for automobiles need to be much larger per person/mile traveled than any other mode of transportation. (Around 10 to 50 times as much time-area as biking or busing.) This ties up valuable land that could be used for buildings, parks, or other uses, drives up land costs, and reduces the viability of healthier modes of transportation by making everything more spread out.

Collective sunk costs. If drivers had to pay the true costs of building and maintaining roads and parking facilities, their out-of-pocket costs would roughly double. Instead, much of these costs are paid for by the government or are built into businesses' costs, and are spread out across everyone, regardless of how much they drive. This provides further incentive to drive, since much of the cost has already been automatically sunk.

Division of urban neighborhoods by freeways. Heavy auto use is associated with the construction of freeways, which have historically destroyed large swaths of communities, reducing social capital and prosperous neighborhoods. The remaining parts of those communities are now largely isolated from each other. Some evidence shows the communities impacted are disproportionately lower-income neighborhoods which had little political influence to resist freeway construction.

Preventable deaths and health impacts. Automobile collisions and pollution kill around 100,000 Americans and 4 million people worldwide every year, reducing economic productivity and causing great suffering.

[edit] External links


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