Trip to the Market

Got to wondering about the cost of that trip to Haymarket. The trip is about 15 miles round trip and I get about 20 miles to the gallon on that drive.

Let’s do this per day. The typical American drives about 30 miles per day. If I’m getting 20 miles per gallon overall then at $2.60/gallon that’s $3.90/day. The insurance is about $1.25/day. The car’s maintenance is about $2.50/day (for example the new tires will cost me $260 over the internet). I estimated the 5$/day depreciation using kbb.com. If capital costs me 5% a year and the car is worth $12K; then the cost of capital is about $1.60 day.


  $3.90  -- gas
  $5.00  -- depreciation
  $2.50  -- maintenance
  $1.60  -- cost of capital
  $1.25  -- insurance
---------
 $12.65  -- Total/day

   $.42   -- cost/mile assuming 30 miles/day

The 15 file trip to Haymarket included a dollar for parking so the trip to Haymarket cost about $7.33.

The IRS has 40.5 cents per mile for it’s standard milage rate. While these numbers for new cars are 15 or 25 cents higher.

Taking a cab would have cost about 4-5 times that much. The cost of the bus/subway combo pass is $2.34 per day. One reason I got to thinking about this was that we just shipped my son’s junk off to college and UPS charged a “fuel” surcharge; which let me to wonder what percentage of their costs actually are fuel. Shipping him, i.e. his plane flight, is amazingly cheap. 7.1 cents a mile.

So far I’ve updated this a few times. First because I had the wrong #s for the insurance; particularly because we just dropped my daughter off the insurance. Secondly because I’d forgotten the cost of capital (thanks Martin). Then we decided that the car’s trip computer is very confusing and I had the wrong distance to Haymarket. A few people have argued that my original $1.50/day for maintainance was too low, so I raised that. I originally estimated the depreciation by just playing with the milage; which got about ten cents a mile. I’ve now played with the age of the car and that adds another 7 cents a mile. Mark Denovich provided the autoclub data for new car cost of ownership. 9/13/05: IRS raises the milage rate to 48.5 cents per mile.

And then we have this poor guy.

12 thoughts on “Trip to the Market

  1. Mark Denovich

    Not having to deal with the “public” that rides on public transportation: priceless.

    BTW: How are you calculating your depreciation figures? Car depreciation is far from linear, and has a lot of variability based on brand/model/style/age/condition. I think for most people buying new cars, they are paying a lot more than $3/day.

    I think your maintenance number is a bit low too… $550/yr should cover consumables (tires, belts, filters, fluids other than fuel) and the labor to replace them, but I doubt it would cover anything that actually needs to be repaired. I generally advise a $1000/yr as a rule of thumb. Some years you’ll get by cheaper, some years you won’t.

    my fleet:
    95 Lexus SC400
    97 Dodge Dakota
    88 Alfa Romeo Milano Verde
    86 Alfa Romeo Spider
    99 Triumph Daytona (955cc sportbike.)
    2001 Bajaj Chetak (150cc scooter.)

  2. Ben Hyde

    Mark – Glad to see yu don’t own any newer cars.

    Along with reading I’ve always considers the fun of observing my fellow man as on the plus side of public transit.

    Your certainly right about the maintainance.

    I looked up the car on kbb.com, and got a price and then repeated adding a 1000 miles. So it maybe low because I didn’t also add a year.

    I should probably redo both those. …

  3. Mark Denovich

    Damn! My last comment timed out, and I lost the contents… *sigh* Let’s try again:

    The newest vehicles in my fleet were only added this year. I like letting someone else take the depreciation hit (I paid $8k for the Lexus… it was $52k new.) It is liberating owning cars that you can afford to have stolen or otherwise destroyed. I don’t have to freak out about every scratch or ding.

    Owning several cars also allows me to own specialist vehicles. I can avoid the trap of trying to find that one car that does everything (generally poorly.) It’s also like having a RAID array… I’m never without wheels and I can wait to work on a car until it fits my schedule.

    More on TCO: AAA publishes a cost/mile for owning a sample of new domestic (and therefore comparitively cheap) vehicles. Their 2005 results are here: http://www.aaasouth.com/acs_news/Drivec05.asp and that’s using 2004 gas prices ($2/gal.) The depreciation figures are over 5 years. $8.17/day depreciation just to own a Cavalier. Wow.

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  6. Momo Jeng

    You’re overestimating the cost of a trip to Haymarket by including normal costs of owning a car. You have to pay insurance on your car each day, regardless of whether you make a trip to Haymarket that day. Similiarly, you say that you include the Kelley Blue Book depreciation from the increased age of the car, but that depreciation occurs even if the car is sitting in your garage. Your calculations only make sense if the only reason you have your car is to make the trips to Haymarket. But if you were going to keep your car, but take the bus to Haymarket, you’d still have to pay the insurance, and your car would still depreciate. What you’re really calculating is the average cost per mile of owning a car, not the average cost per mile of an additional trip to Haymarket.

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