By George Harvey
The cost of owning cars varies enormously. Factors include the price of the car, the cost of financing it, its age, how it is maintained, insurance, where you park it, how you drive it, cost of fuel consumed, and registration fees.
Points that are not obvious include things like how much time the car spends idling, and how aggressively it is driven. These two factors alone can shorten the reliable lifetime of the car by as much as 50%. (Ask your town manager about the life expectancy of police cruisers.)
The American Automobile Association estimates the cost of owning a car each year. Right now, costs are about as low as we might expect them to get, because of the price of gas. Even so, reducing the AAA’s estimate for car ownership in 2014 to compensate for the difference, we get these average costs for car ownership:
- Small Sedan $5993 per year
- Medium Sedan $7615 per year
- Large Sedan $9330 per year
- SUV $9510 per year
If you think this is a lot, you might want to consider the other costs that AAA did not include in their calculations. We will mention some, and you can tally what you think they are worth to you. A certain Mr. Q. provided us with his evaluations.
How much does parking cost? Many urban apartment dwellers pay over $250 per month for their parking places. Mr. Q. gets, who gets parking with his apartment, considers it to be worth 5% of his rent, making it $50 per month, or $600 per year.
How much is it worth to feel fit? You could pay $50 per month to a health club. Biking and walking reduce body fat, increase endurance, strength, and agility, saving you that amount. Mr. Q. is rather lazy, however, and would not use a gym, so he adds a $0 annual cost.
How much is it worth to avoid medical costs? Exercise reduces likelihood of heart disease, high blood pressure, stroke, colon cancer, breast cancers, diabetes, osteoporosis. Would we pay $75 per month for that, perhaps? Mr. Q. agrees, and adds $900 per year.
What about the value of a sense of well-being, and reduced levels of stress and depression, and even a reduced possibility of dementia. Mr. Q. (who looking surprised at being asked what he would pay to avoid dementia) says it would be as valuable as a vacation, another $1200 per year. (We inform him that he may not change his answer to question 2.)
A recent study says adding the environmental costs to the price of gasoline would raise it by $3.75 per gallon. For Mr. Q.’s car, which uses 500 gallons per year, so that adds $1875 to the annual cost of car ownership.
Assuming that a bike costs $500, gets $25 in maintenance each year, and lasts ten years, its cost is $75 per year. We reduce the savings of giving up a car accordingly. Mr. Q., who drives a mid-size sedan, could save $12,115 per year by biking and walking instead.
Clearly there are some people who cannot just drive a bike. They might benefit from considering ride shares. Many have no easy way of giving up a car. Our editor, who lives far out of town on dirt roads, making winter snow and mud season difficult, and who has to transport thousands of papers at a time does ride bikes all over the countryside, including an electric bike powered entirely by solar PVs, but her car is a necessity, at times. For such people, the only thing that makes sense for now is to keep a car that is worth the cost.
But for many, the question is, what would you be willing to do for $12,000 per year? Would you give up the car and bike or walk? Mr. Q. has a slightly-above-average savings of $12,115 per year, which he believes is really good pay for not being lazy. We will keep tabs.