What does it cost to own a car?

There have been a few good articles recently about the social cost of cars. Here is a good one -- it nicely summaries what many people are unaware of: vehicle registration does not pay for car infrastructure. Cars require a taxpayer subsidy.

People who ride bikes subsidise people who drive cars.

Here, I want to explore something different.

1. What does car ownership cost its owner?
2. How much time must the average car owner work to pay for their car?

These questions aren't often asked, so I ran a few numbers in a simple spreadsheet, which can be viewed here.

The cost of car ownership:

A private citizen on a slightly above-average income will spend 2.75 hours per week working to pay for their car. This includes a very small mileage (less than 40 kms/week). As the weekly distance driven increases, so too does the cost, though the cost per distance decreases.

A private citizen on a slightly above-average income will spend 2.75 hours per week working to pay for their car.

I ran the "model" with a heap of [distance travelled] options to explore how much work was required. I estimated several things:

1. work hours per week
2. Cost in Australian dollars per kilometer driven
3. time spent working, per distance. This is measured in hours per 100km per week. This is the time that is worked by the car owner, each week, for each 100/kms they drive.

What I found really interesting is that it is really expensive.

For a person who drives 10000 km per year (just under 200 km per week) they must work nearly 4 hours per week, which equates to more than 2 hours work per 100km per week, for a total cost of $0.44/km driven. Suddenly public transport is looking very cheap indeed. Remember, this is the private cost borne by the car owner, and does not include all of the public costs borne by the Australian taxpayer.

A total cost of $0.44/km driven -- a limo is cheaper!

As you drive less, owning a car makes even less sense. For someone who drives 3000 km per year, the cost is more than $1 per kilometer. You could catch a limo cheaper than that!

Conclusion

Owning a private car does not make economic sense, even with the strong public subsidies that currently exist. Of course, the bottom line is not the only consideration, so I understand that people will want to keep a car, just for security and convenience. However, if you are a household with more than one car, I would strongly encourage you to consider getting rid of one car and exploring other forms of transport. Your wallet, and your country will thank you!

This article was written by Angus Wallace and first appeared at

guesstimatedapproximations.blogspot.com.au