There has been a lot of hand-wringing among drivers lately (3/21/2005) over the price of gasoline for their automobile. People are getting all excited and whining about how much it takes to fill up the tank of their favorite gas hog. And the whines all end with "... and there's nothing I can do about it."
Nonsense.
There are plenty of things drivers can do about gas prices, if only they can be bothered to think outside the driver's seat. The easiest one is to figure out how to drive less. To provide a motivation for such a strange idea, I'm offering a challenge for all drivers who feel chained to the gas pump: discover how much it costs you to really go somewhere in your automobile of choice. Once you know how much getting to a destination really costs, perhaps less driving and more alternative transit will seem far more interesting to you.
The first step is to calculate the fixed costs of your automobile for the past year. You may have to dig through your receipts, checkbook, and credit card bills to get these numbers. Fixed costs are all those costs you would have to pay if you parked the automobile undriven at "home" for a year, but kept it ready to drive at any time. Fixed costs might include:
Some people, especially the accountants among us, are going to wonder about apportioning property taxes or garage rental costs that includes space for storing your stuff or another automobile. Don't sweat this level of detail unless you really just can't sleep at night over it. If you are losing sleep, just make a good estimate and get on with the thinking process. Remember: progress, not perfection.
The second step is totaling up all the variable costs of driving. Variable costs are all those costs that depend on the amount of driving you actually do. When I was driving my car 90 miles one way to work, I paid for four oil changes a year to stay current on maintenance, two more than I would have otherwise gotten due to seasonal temperatures. Variable costs include:
If you can't decide whether a cost is fixed or variable, stick it in the category which makes the most sense to you. Don't get hung up on small details; there is no single "right" answer anyway.
Now for the really difficult third step: count your trips for a month. The easy way to do this is put an index card and a pencil on the dash or in the ash tray and make a hash mark every time you turn off the ignition. Some of you will note that you don't turn the car off at every destination: use your best judgment about what is and is not a destination for you and be consistent when you count. I think driving by the post office and throwing something in the box from the drive-thru lane is a destination even if I don't turn my car off. If you don't think so that's fine: just be sure to not count the post office drive-thru every time you go. And yes, home is a destination. If you live in your car full time, you may want to give the concept of home some special consideration.
Some of you may want to get slightly more sophisticated and note the date and name of each place you go in a small notebook. More data is better: you may discover that you are consistently driving the same pattern most days, and this is very useful to know when you are considering alternative transportation means. Keep track of all your volunteer miles while you are at it and legally deduct them from your taxes if you file 1040 Schedule A. ;-)
Regardless of what you count, do it for at least whole month. Doing this for a year might be more accurate, but a reasonable estimate can be done in just a single month.
Here's the fourth step: all that brain-bending math. A four function calculator can help you through it.
Consider carefully the total cost per destination. Now go find the cost of public transit, if there is any available to you, that might take you to at least some of your destinations. How do they compare? If your automobile's cost per destination is more than the cost of public transit, are you willing to be a little greedy with your own money (frugal?) and consider riding public transit more often? Why or why not? Is your "driving lifestyle" so important to you that you must burn all that money up in your gas tank?
Now compare your variable cost per destination to the cost of public transit to get to your destination(s). What did you learn?
I tracked our driving for over two years, starting in late 2002. We noticed there is seasonality in our driving for various good reasons. For example, my wife spends more time in her car early in the year due to her volunteering schedule. So consider your estimate of annual destinations carefully; if you tracked for a whole year (and I do recommend this), you may come out with a much different destination count than if you estimate from a single month's tracking. If the results of the first month intrigue you or are somehow unsatisfactory, try tracking your destinations for an entire year.
For the calendar year 2003, I determined that we went to 850 destinations with a variable cost of $0.68/destination and fixed costs of $4.86/destination for a total cost of $5.54 every time we turned the car off. Since a destination by bus cost a $1.00, driving ourselves most places lost hands down. We both rode the bus as much as we could: driving was 5.5 times the cost of a bus ride in 2003 for us.
In calendar 2004, my wife's work location changed, necessitating that she drive to work; I still ride the bus every day I can. The numbers worked out to: 1452 destinations, $1.52 in fixed costs, and $0.47 in variable cost per destination, for a total cost of $1.97 per destination. The bus company also raised fares to $1.25 in 2004. Driving was 1.5 times the cost of the bus in 2004 for us. For those of you digging into the math to find why it fell so much, 2003 had more car repair expenses than 2004. Our insurance went up in 2004 from 2003 not only because insurance just goes up every year, but also because we had to take her car out of "pleasure vehicle" status and return it to "commuter vehicle" status at an extra annual cost of $325. We also pumped in more gas because she was driving more: $230 worth.
The distinction between variable and fixed costs is important to see because we seldom think about the fixed costs of owning an automobile. When it comes to "economizing" on our driving, we usually think only of a piece of the variable costs: the gas and maybe the oil changes. We forget all those other fluids and things which wear out regularly because we drive "too much".
We also seldom think about the fixed costs of "extra" cars we may have sitting around. One of my friends calculates a per-day cost for her car (total annual cost/365). This can be just as much of a shock as the per-destination cost. If your fixed costs are huge compared to your variable costs, you might be wise to consider whether the car is too expensive to have bought in the first place or if the repairs being made are really warranted.
Since we don't have car payments, our costs are significantly lower than the costs for someone who has car payments. If we were paying off a $20,000 loan for each car (a little less than what comparable models would cost new today), we would add $14,735 per year to our fixed costs for the privilege of owning two "new" cars. If we figure this backwards into the 2003, our real cost per destination would have been $17.34 + $4.86 for fixed costs or a total per destination cost of $22.88. For 2004, the total per destination cost works out to $12.12. All of a sudden trading an automobile off every three years just to avoid random maintenance costs starts to look really expensive. It should also be obvious that not replacing a dying automobile in favor of alternative transit means you can potentially save a significant amount of money.
It is a side effect, but if you drive less, your automobile will last longer (especially if it is properly garaged). Not only does daily use wear things out faster, but you are beating the odds by driving fewer miles: there is less chance of getting in an accident. Both our automobiles are 17 years old and will be registered to vote when they are eligible. We paid them both off early and have saved a minimum of 13 years of car payments just by keeping them up to date on maintenance and in the garage as much as possible in the winter. With any luck, they will make it to drinking age (21), though my truck does not like E85 much. 8-)
Because I drive my truck so little, I put gas in it monthly at most, but usually once a quarter. This means I can keep an eye on gas prices after I notice my truck needs gas and then arrange to fill it up when I notice prices are near a relative low point - which can easily save $0.20 per gallon.
Another side effect is that time spent on alternative transit is time you do not have to spend any energy paying attention to other drivers doing stupid things in traffic or dealing with road rage. Have you ever heard of "walker rage" or "bus rider rage"? I haven't either. I get a lot of reading done during my daily bus commute because I leave the driving to someone else.
The last side effect is even more subtle but powerful nonetheless: if you do not drive yourself home from work, you can spend some time unwinding from work before arriving at home and without needing ingestable substances (yet another savings)! I can be human with my wife almost immediately after arriving home instead of needing half an hour of home time to shake off my "foul mood" from work and traffic.
There is a (hopefully apocryphal!) story about frogs. It seems that if you throw a frog into a tank of boiling water, the frog will jump out. But supposedly, if you take a frog and put it in a beaker of water and then slowly raise the water temperature to boiling, what you get is a boiled (and dead!) frog. By the time the frog realizes it needs to jump out, it is too late: the higher "normal" temperature has weakened the frog so much it can not jump out and therefore it dies.
In 2001, gas spiked from $1.25 to over $1.70 in my city. As a fan of public transit, I was already a regular rider of the bus. (I'm frugal too: my employer was paying for my bus pass by this time since employee parking was, and still is, so bad where I work. Prior to the parking situation getting so bad, I was buying an annual bus pass for less than $120/yr.) All of a sudden, there was this herd of new people on the bus I had never seen before, and they were all complaining bitterly about how expensive it was to fill up their tanks: it was "too expensive to drive to work" they declaimed in near-unison to all who would listen. Of course, the price spike did not last, gas prices fell back to "normal" levels ($1.50), and the new riders quit riding the bus within a few weeks. It seems habits die hard.
Fast forward to 2005: SUVs are the rage, their gas mileage is abysmal (my 1989 cars get better gas mileage than most new 2005 automobiles - this is really, really, shameful!), and gas is over $2.25/gallon (9/2005) for the cheap stuff. Do you think there are a large number of people riding the bus and whining bitterly about the price of gas today? Nope. Gas prices have slowly risen over the last four years. "Normal" is now $1.80 a gallon, more than the 2001 spike price and inflation does not account for it.
Boiled frogs. It seems habits die hard.
I hope the parallel is obvious. Every driver that isn't still riding the bus after the warning they got in 2001 is behaving just like the frog in the beaker: slowly being boiled financially at the gas pump. This phenomenon is observable nationwide, not just here in my city.
In 5/2008, with gas over $3.50 per gallon, the number of frogs in the stew is simply mind-boggling. It has gotten so bad the drivers of those popular big SUVs in 2005 can't trade them off in 2008 because no one wants to buy them. Meanwhile, my small car and truck are still trundling along, soon to be 20 years old, and still getting better mileage than most cars including several comparably sized cars. Wake up people, and smell the stew!
There's been a lot of wailing and gnashing of teeth about gasoline prices. I have been very careful to only make a financial case and leave out discussions about: OPEC, ANWR, the world's environmental and political situation, the current US administrations at the Federal and State levels, corporate greed, conspicuous consumption, emasculated and eviscerated CAFE standards, over-leveraged consumers, and all those other things we could be shrieking mad about which affect gasoline prices or otherwise could influence our personal driving behavior. I hope the financial case is enough to motivate some serious reflection on your part about your personal "drive-style". But if the financial case isn't enough, feel free to add your personal opinions about those other items to your deliberations. So here is the financial challenge again, for your consideration:
If you don't like spending so much of your life energy pumping gas into your tank, then figure your cost per destination for the automobile(s) you drive and compare them to other transit alternatives for your destinations. Is your "driving lifestyle" still worth it to you?
I have shown with hard mathematics that public transit can be cheaper by a factor of 20, 10, 5, or even as little as 1.5, times the price of driving for my families most common destinations in my city. Every time my bus goes past the gas station and I see someone pumping $2.50/gallon premium (10/2005) into their tank, I just smile to myself and go back to my reading. My "drive-style" just isn't worth that amount of money.
I hope this page shows you how to do the calculations for your situation (and everyone's situation really is different). There are many transit options besides being a boiled frog:
You alone have the power to think out of the driver's seat and change your drive-style: take that power and use it productively! Challenge yourself to find more solutions that fit your personal situation not mentioned here; there are probably quite a few. Let me know the best ones and I'll put them up here for others to consider.
And if you are reading this Darlene, the early morning Route 14 regulars would love to see you back! Drop me an e-mail.
Last Updated: 080510.