Tag Archives: Automobile

The True Cost of Driving

How much does each one of these drivers spend per mile?

How much does each one of these drivers spend per mile?

When I was researching for my last project (see last post), I stumbled across this calculator for the true cost of driving created by Santa Cruz County’s “Commute Solutions” program.  This is the best attempt I’ve seen to fully quantify the multitude of costs associated with driving, since it factors in not only the cost of the car, fuel, insurance, maintenance, and fees, but also infrastructure, congestion, pollution, parking, accidents, land value, and other indirect costs.  According to this model, the average cost on an individual driving 10,000 miles per year is somewhere in the range of $12,000-13,000, and the average cost for 20,000 miles per year is $26,000 (AAA determines that about 8,300 of this is direct costs).

While actual costs vary from place to place and depending on fuel prices, after some analysis I’ve arrived at some staggering conclusions.    When multiplying the average cost per mile of $1.28 (by default assuming current prices of about $2.25/gal) by 240 trillion yearly vehicle miles traveled (VMT), which is a rough estimate of the current total, and America’s total yearly cost of driving is $3.7 trillion , or a whopping 25% of our GDP (the actual yearly figures are likely in the range of $3.25-4 trillion).  Just pause and think about that for a second: one out of every four dollars in America is spent on driving.  Should Americans have to spend that much on transportation?  What does this mean for lower income Americans?  Also, a 10% reduction in driving would save up to 400 billion per year, and a 25% reduction would save almost one trillion per year.

That’s a lot of money.