How Much Does it Cost Every Time you Get Into Your Car?

By Nora Dunn on 27 August 2008 (Updated 1 April 2011) 15 comments
Photo: Doug Wilson

I recently found myself living out in the countryside near Melbourne Australia. And aside from gas being referred to as “petrol” among other Australian idiosyncrasies, living out here could be equated with life in the countryside just about anywhere:

  • Anything within 50 kilometers (31 miles) is considered “close”
  • You have to drive to get anywhere (sometimes including your own front gate)
  • The cost of living can be more expensive (depending on how judicious and creative you are)

 

And last but certainly not least:

  • You will spend a small fortune on gas. Petrol. Whatever.

 

Here in Australia, if the price of gas is much below $1.50/liter (the equivalent of about $5.68 /gallon), people practically dance in the streets with joy; it regularly hovers at a price point much higher. And so one day driving back from running some errands in town on a week when I had traveled into town more than I would have liked, I glanced down in shock at my gas gauge: empty. It seemed that I had consumed more gas in the last week than I had realized.

 

This led me to a minor budgeting revelation: Every time I travel into town, I spend almost $10 in gas. This was a shock to the system; if there was a bus, I would have happily taken it to be sure. But out here, no such thing exists. (Such is the price you pay to live in the country; a price happily paid by most who live here).

This revelation led to an immediate change in attitude towards driving:

  • Carpooling is now an active goal, if not a necessity (not only for the environment, but also better value when driving).
  • A trip into town doesn’t happen unless at least three separate and important tasks can be achieved.
  • Mail order is king!

 

When I started to even more closely examine the cost of gas/petrol, I realized how much more there is to driving: insurance, maintenance, and wear & tear for starters. If I averaged out the cost of these factors and added them into each trip into town, my excursion shoots up even further to approximately $13.

 

$13 just to go into town; to get some groceries, make a social call, or see the dentist. That’s not pennies. And here’s the corker: Although I live in the country, town is not all that far away, and it is all highway driving.

How many people who live in the city (or a bedroom community) commute 20 miles or more to work, and in stop & go traffic no less (which increases the cost of gas and wear & tear)?

How many people who live in the city (and commute in their cars) actually pay higher insurance premiums to do so?

How many people who live either in the city or the country don’t think about all this every time they get into their car?

 

So the next time you say you’ll just “hop in the car” to nip off somewhere, think about how much that little trip will cost you. You may decide in the end that the trip doesn’t have to happen today, or that maybe you can kill two birds with one stone by adding another errand to your list.

 

At the very least, it pays (literally) to figure out for yourself how much it costs every time you get in your car. Only then can you make a rational frugal decision as to whether or not putting the key in the ignition this time will fit into your budget, and not just a life of convenience.

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Guest's picture

In the US, the IRS has calculated mileage deductions for business to be 58.5 cents per mile for the latter half of this year. This is the price they have calculated it costs to drive one mile, including gas prices, insurance, maintenance, etc. Depending on your car the actual amount is over or under but it's just an example why, if you run your own business, you should ALWAYS keep track of your mileage.

I make a small living as a freelancer, and more than half of my deductions come from mileage (I worked for over a year on a job that required me to drive 74 miles roundtrip daily, and they didn't reimburse me for the gas).

Guest's picture
Guest

You did the conversion backwards. $5.68/gallon, not 40 cents. I'd be dancing in the streets too if gas hit that low, and I don't even own a car!

Aside from the puzzling conversion error, this was an excellent article, and one of the many reasons I love public transportation.

Guest's picture
Guest

Public transportation is approximately the same cost per passenger per mile, it just happens to be heavily subsidized.

Guest's picture
Michelle

We are scratching our heads here and figuring you must mean about $6 per gallon rather than $.40 per gallon--which would be tremendously low, as we are running about $3.29 here in Missouri, USA. I remember seeing $.689 about ten years ago, and that was notable at the time. Anyway, that's something like $.15/mile in gas alone for a car that gets 20-25 mpg. Insurance, maintenance, and wear and tear add still more.

You can see some stats on U.S. gas prices at the Energy Information Administration of the Department of Energy: http://www.eia.doe.gov/oil_gas/petroleum/info_glance/petroleum.html

Guest's picture
wildgift

My truck gets around 24 mpg on the highway, and I don't know what it gets in the city. Driving at 55mph on the highway, I burn a little more than 2 gallons per hour (because I move 55 miles, 2.2 gallons get used up).

Even though efficiency changes depending on driving habits, that 2 gallons per hour number seemed like a good "floor" for calculating costs. My 30 minute commute to work costs 1 gallon of gas. Two of these combined is 2 gallons of gas. So it costs $8 a day to drive to work.

In contrast, a monthly bus pass costs $62 (in Los Angeles). If I ride the bus to work 8 days, I break even! After that, every bus trip to work saves me $8. I've ridden the bus 12 times this month - because I got the pass late. That means I'm profiting over $30 by riding the bus -- my net transit costs will be $30 less this month, or so.

On top of that, I'm getting more exercise because I have to walk everywhere.

Guest's picture
Emily

When I went full-throttle hypermiling, finding out my cost-per-mile was very important to me. It costs me $0.14 for every mile my car moves, based on gas prices and my Sentra's MPG. That's a sobering fact to me, that just to hit my local grocery store (only 2 miles away, not to rub it in Nora), is about $0.60. It's not a bike-friendly neighborhood, but we find ourselves relying on pedal power more and more often.

Guest's picture

It's often sobering to do the math on things we've taken for granted as basics in our lives. (But yes, your cost per gallon does look a little off.) I've found this practice very enlightening at times. Even if the number isn't as shocking as the example you give, it's eye-opening to know the actual cost of things we own or do. I just figured out that it costs me about $3.30US worth of electricity per month to run our chest freezer. Good to know these things, even if it causes a wince now and then.

Guest's picture
Dwight

Add up the time spent in your car and the time working to pay for automotive expenses. Divide that into the number of miles you expect the car to last. It comes out to be about 7 miles per hour. That's before the recent price increase. Now, the number is slower than 7MPH.

Look at it that way and you will see that bicycles are faster than cars for local and semi-local trips.

Guest's picture

I'd even include the opportunity cost of capital to driving. This can range from 3% to 30%, depending on your financial condition (i.e. are you deferring earning interest on time deposits or paying high credit card rates you could otherwise pay off if you sold or didn't buy your car?).

For those in the less "fortunate" category, who have high interest credit cards, the total cost of driving - including fuel, insurance, maintenance, and cost of capital - can easily reach $500/month.

Guest's picture
Julia

Great article other than the crazy conversion error. I like Dwight and Rob's thoughts. I once divided the price tag of my car by the number of miles I had used it. The number scared me. I've owned the car 8 years, (it is a Celica, bought new), and that number is 34 cents per mile. That number is not even including maintenance, new tires, car washes, sound system improvements, GAS, insurance, interest on the loan, tolls, parking, etc.

A big problem with our car-centered culture is that we are pretty removed from the actual costs of driving. A second big problem is that once you've bought the car, you can't lower its initial price tag by driving less. Considering it is probably your most significant expense when calculated per mile, it seems logical to most people to keep driving it more miles to get more use out of that expenditure.

I'm going to have to think about Dwight's comment on miles per hour a little more. It's a very interesting way to think about car efficiency.

Guest's picture
David C

My fuel milage varies from 22 miles per gallon if I drive like an idiot to near 27 if I keep it to 60-65 range. Yes, everyone passes me like I'm an overloaded semi; so what. I have a rather paid off car that is very reliable and reqiures litte maintanence. With a 40 mile round trip commute I come out only a litte higher than mass transit. Car selection and patience is a huge factor in operating expences. Learning not to be concerned about "keeping up with the Joneses" will save anyone a fortune. Choose your automobile wisely and yes park it as often as your feet can take.

Guest's picture
steve

In general, any time costs are removed from time of use or purchase, it will be easy to understimate them.

Driving a car is a good example of this, as is electricity usage and other things where you only get feedback maybe once a month, but you use it in smaller, more continuous amounts daily.

You can make up a sticker with the price per mile and put it on your dashboard and it will make you more conscious of how much it costs.

My commute is only 6 miles round trip, which comes to .80 USD per day at recent prices. (my car gets about 30mpg, and gas comes out to 16 cents per mile at $4/gal.)

I usually ride my bike, and over the year it saves me about $200-$250 in gas, depending on price fluctuations. That's a decent sum.

I usually pick up groceries at the supermarket on my way home from work, so that prevents some other car trips for shopping.

The car gets used for long distance trips or when I have to carry more stuff than my bike is set up to handle, or when I'm pressed for time. It's become a habit for me to calculate the cost of driving when deciding to go someplace, and the result is that I usually decide to pool my trips and reduce the amount of them. This planning ahead saves a lot of cash and time, and also reduces my exposure to stores and the temptation and opportunity to shop, which overall is a good thing for me.

Overall, I will agree that the costs of owning and operating a car are impressive, even while the freedom and flexibility cars provide are pretty incredible.

Guest's picture

I'm big on combining errands too...and like you, I'm much more motivated when I think about a trip in dollars and cents.

Super cool picture of the gas pump, by the way!

Nora Dunn's picture
Nora Dunn

Thanks for pointing out the error...something didn't look right!

Great observations about methods of calculating mileage.  Thank you for the comments!

Guest's picture
wildgift

I made a web-based calculator to estimate how much money can be saved by riding the bus instead of driving.