Amidst a strong economy and with fuel prices near a six-year low, Federal data shows vehicle miles traveled have increased slightly since 2013. Looking closer however, the same data shows vehicle miles traveled in the US, adjusted for population growth, are still down 6.29 percent from an all-time high in June 2005. Driving fewer miles, even with lower gas prices, doesn’t change the fact that driving is still very expensive. Beyond the price of gasoline, many drivers do not realize the true cost of driving. Unlike housing, vehicle costs are spread into many different categories throughout the year.
The average U.S. household spends 32 percent of their income on housing— not a surprise. But that same household spends 19 percent on transportation expenses. Transportation as a share of household income climbs to 25 percent in auto-dependent suburbs. And while gas prices seem like a big part of our driving expenses, they only account for 13 percent of vehicle ownership and operating costs for the average driver.
To gain a better picture on how much it REALLY costs to commute to work, I’ve aggregated the expenses into one number – as if we were to feel the aggregate cost of all of our driving expenses each time we went to the pump to fill up.
According to the Federal Highway Administration, ownership and operating costs break down into eight categories, with depreciation, financing and insurance accounting for more than 3/4 of total ownership cost.
Chart 1 illustrates that fuel and fuel taxes account for 13 percent of the total cost of driving. Now think about how much it costs to fill your gas tank. At $2.50 per gallon, the cost to fill a 20-gallon tank is $50. If that $50 dollars only represents 13 percent of the cost of driving, then each time we spend $50 dollars on gas we are also spending $334.61 on other auto-related expenses—which means the total cost of using that $50 tank of gas is really $384.61.
In other words, if your vehicle gets 30 miles per gallon and a gallon of gas is $2.50 per gallon, each mile you drive costs you 64¢ of which only 8.3¢ goes to fuel and fuel taxes. At 30 miles per gallon a 20-gallon tank will take you 600 miles at a total cost of $384.61.
What does this mean for an average commuter? Driving from North Bothell to downtown Bellevue a commuter drives about 15 miles each way. The real cost to drive 30 miles, accounting for all vehicle expenses, is $19.20 per day!
For $19.20 per day, a commuter would pay about $422.40 per month to commute to and from work. Add parking cost (2015 average downtown Bellevue monthly parking rate of $181.22) to that total and we could easily spend over $600 per month driving to and from work—not to mention one to two hours per day stuck in congestion. For $126 per month, the same commuter could purchase a monthly transit pass and—if they don’t own a car—still have close to $500 left over for housing expenses, vacation money or an early retirement.
We understand the above figure is based on the total cost of car ownership and that some of the costs don’t scale as acutely with a reduction in miles driven, particularly finance cost. Regardless, the above figure is presented to spark a conversation about the real cost of driving. And as I learned when I starting using public transit and biking for my commute trips, and using transit, biking and walking for many of my non-commute trips, most of the costs do decline as the mileage decreases. For example, I receive a reduced rate on car insurance because I drive fewer than 5,000 miles per year, my vehicle is depreciating at a far slower rate, and by putting fewer miles on my vehicle, I pay less for repairs, maintenance and fuel. Furthermore, my family and I are now considering giving up one vehicle, and even if we don’t, we certainly won’t need to add a 3rd vehicle when our son starts driving in the next couple years.
You can calculate your own commute cost by clicking here or find the link at Choose Your Way Bellevue. Learn more about the real cost of driving here.
-Choose Your Way Bellevue Staffer Jason