Our Cars Cost Us $0.242 per Mile

by Kevin on March 12, 2008

Sometimes I wonder what that extra trip to the grocery store really costs you. People in the blogosphere have talked about making sure you get as many errands run as possible when you go out. I agree. But I always wondered, does it really matter?

The calculations:

Figure out total costs for some standard unit (time periods like year, month, etc.; miles):

  • Insurance – $738.20 per 6 months ($123.03 per month)
  • Tires – $400 every 50,000 miles
  • Gas – I’ll estimate this at $3.50/gallon for now even though prices are at $3.13 or so. I’ll also estimate that we only get 20 miles per gallon, even though I know it is higher. As you know, city driving means lower mileage.
  • Maintenance and Oil Changes – Maintenance is the hardest to calculate. It isn’t easily identified how much one mile will affect your vehicle down the road when parts start to need replacing. Oil changes are easy — at minimum you’ll have an oil change every 3,000-5,000 miles depending on how far you want to stretch it. We’ll estimate a bit high and say $25 per oil change. If you stretch it out to 5,000 miles like we do, thats $0.005 per mile. For maintenance in general (including oil changes), we set aside $25 per month, so we’ll just run with that.

Note this is for two cars. We could allocate some costs based on how much used by each vehicle. One example is insurance. The total cost is the combination of two different coverages for our cars. My Accord is more expensive by about $120 per 6 months. You can find this information somewhere in your insurance documents. I could take that information and figure out how much of each month should be allocated to my car. That’s complicated. For our purposes, I will just divide the number in half. The same goes for gas usage as well.

You also need to estimate how much you drive each month. If you track your gasoline usage like I do, that’s pretty easy. Or you can just estimate. I would guess we average about 15,000 miles per year each. That’s 1,250 miles per month. (I’m also hoping that estimate is a little high.)

Do the Math

Cost per mile per car:

  • Insurance ($61.52 per month / 1,250 miles per month): $0.049 per mile for one vehicle
  • Gas ($3.50 per gallon / 20 miles per gallon): $0.175 per mile
  • Tires ($400 / 50,000 miles): $0.008 per mile
  • Maintenance ($12.50 per month / 1,250 miles per month): $0.01 per mile

Total: $0.242 per mile per vehicle. If we each drive 15,000 miles, that comes to $7,260 per year.

Of course this is all based on estimates, not exact science. If I round up so the in-my-head math is easier, I can say it costs us 25 cents per mile to drive a vehicle. If we venture out 2.5 miles and come back, we’ve just spent roughly $1.25. This is just one of those little things to keep in the back of your mind when you consider going out for that extra bottle of wine, or block of cheese, or even to buy more gas. You’re spending money along the way.

If you live in a city with excellent public transportation, look at your numbers. Is it cost effective for you to stop driving? You would have to factor in costs of riding the subway or bus, but we both know you’d end up with money in your pocket. I’d love to have an extra few thousand dollars to play with each year, but our city’s public transportation is awful.

Do you know how much your driving costs you?

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Get Rich Or Die Trying » Blog Archive » Posts of Interest
March 12, 2008 at 8:13 am
Rent a Car vs. Take Your Own: Can You Save Money? | Prime Time Money
August 3, 2009 at 5:01 am

{ 7 comments }

JB March 12, 2008 at 8:01 am

This post is awesome! I’ve always wondered this same thing… if I’m going to the grocery store to buy a 50 cent can of beans… how much is really costing me? Thanks for answering that!

Mom March 12, 2008 at 9:19 am

Dang if you are getting an expensive oil change for $25 then I am getting seriously ripped off!

Fiscal Musings March 12, 2008 at 9:54 am

If you’re looking to see what each additional mile you drive is going to cost you, then you’ve got differentiate between fixed costs and variable costs based on how much you drive. Insurance for example will cost you the same whether you drive 25k miles per year or you leave the car in the garage all year so it isn’t really a factor for each additional mile. Just something to consider. I dig the overall gist of the post.

Kevin March 12, 2008 at 1:41 pm

I agree with you in concept, but not in application.

Conceptually, yes, if we stopped driving we would still be paying insurance. That is fixed (then again, if we are stopping driving completely, then why not just cancel the insurance?).

However, in application we are not going to stop driving any time soon. So within this relevant range of driving (say, any significant amount of driving above 0 miles), I think insurance can be broken down to a mileage estimate. I think this is especially true because we are driving a pretty consistent amount year to year.

It would be different if our mileage changed greatly from year to year. One year 5,000 miles and the next 15,000 is going to greatly change how much that insurance is costing per mile.

In the end, I was just trying to get a unit of measure for each mile we drive. Breaking it down to fixed, semi-variable, and variable costs (thank you accounting class) seemed a bit over the top.

Fiscal Musings March 12, 2008 at 2:04 pm

Like you say at the end of your post, if you’re considering going out for an extra bottle of wine or block of cheese. This assumes you’re already driving some (hence keeping the insurance), but wondering if an extra trip is worth it. I still don’t think insurance costs matter in making this decision since you’re going to be paying it anyway.

Looking back over a year, or a month, you can see what the actual cost distribution per mile was, but it doesn’t affect a decision about making a quick run to the grocery store.

In light of these small extra trips is why I made the comment about insurance costs not really being a factor. I’m not concerned with the extremes of not driving at all or anything.

jay March 12, 2008 at 8:43 pm

Regarding factoring in the cost of insurance: keep in mind, at least where I live, rates are based in part on your annual mileage, so it does matter how much you drive. Not a huge difference, but some.

Excellent post! Reminds me of Amy Dacyzyn.

jason August 12, 2009 at 4:04 pm

you are missing one BIG cost: DEPRECIATION.

Certainly that cost will be greater in the early life of the car. However, the fact that you devalue your car by driving it is certainly a cost of driving.

BTW, don’t agree that fixed costs like insurance are measured by mile. I think that is the cost of being ABLE to drive [or more specifically, being able to own the car], not actually a cost of driving. If you buy a vehicle and drive zero miles, you still have to pay for the insurance as long as you MIGHT drive the car.

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