Friday, September 24, 2010

Cost of Driving

Even a modest car costs $15,000, and say lasts 150,000 miles. That is $0.10 / mile. But most people drive more expensive cars, and pay interest. So let's say $0.20 per mile. Then there is repair and maitenance--$.0.05  mile. Gas--if you have a reasonably economical vehicle, these days it would be about $0.10 / mile. Insurance varies a lot, but let's say $1000 per vehicle/driver for 15,000 miles/year, that would be another $0.07 / mile. We're already up to $0.42 / mile. And we haven't even considered the cost of infrastructure, ordinary pollution, or carbon emissions!

So if you are a two-car family and average 25,000 miles/year on those two cars (typical for the suburbs), then your annual cost of driving is over $10,000. Since you have to pay for that out of after-tax income (naturally), it probably takes close to $15,000 in earnings to pay for that mileage. Oweee. There is a school of thought that says people might drive less if the cost was on a pay-as-you-go, per-mile basis. I am inclined to agree. (Same problem--not pay-as-you-go--to a smaller degree with home utilities.

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