Does it really cost me 57.5 cents per mile to drive my car? I’ve driven 40,000 miles in 2 and a half years. That means my car has costed me $23,000 to drive so far. How is that even possible?
In: Economics
Gas, insurance, vehicle depreciation and maintenance costs. Yes, it probably costs close to 57.5 c/mile for you to drive. Much depends on the model of course
Let’s be a little bit generous and assuming you purchased a ~$17,000 car and would drive it for 150,000 miles before it has absolutely no value except scrap. That’s ~11.3 cents a mile just in vehicle ownership.
Gas at $2 a gallon for a car that gets 30mpg would be about 6.6 cents a mile just in gas. And gas is usually quite a bit more expensive than that.
That’s not even including costs such as taxes, registration, regular inspection, any maintenance/repairs, etc.
The IRS gives a fairly generous deduction so that few people would have a reason to keep track of expenses and claim a higher mileage rate.
Gas, maintenance, wear and tear, insurance, etc. are all factored into that $0.575/mile figure. Basically, every single expense related to owning and operating a car.
If you factor in every cost associated with your car, I’ll bet you’ll find the number isn’t that far off.
It’s an aggregate of many things. You pay for the car itself, which will only last so many miles; that’s a cost per mile right there. Maintenance is another. Fuel, oil, and other consumables add on. Tires, insurance, repairs, etc. Driving is actually quite expensive when you zoom out and look at the whole picture. The ironic thing is that a lot of people drive to go to a job to get more money than a closer job they could bike to, and they burn most or all of that up on the car.
That factors in things like fuel, car payment, depreciation (drop in value over time as vehicle gets older and has more mileage), maintenance and repairs, etc. It may differ based on exact vehicle — a heavy duty pickup truck would cost more in fuel than a Toyota Prius, a Bentley would cost more to repair and maintain than a Ford Crown Victoria. And things like gas prices can vary greatly around the country and over time.
But let’s look at your numbers…
40k in 30 months is 1333 mi/mo., or about $766/mo in deductible expense.
If gas costs $2.50 and your vehicle gets 25mpg, that’s 53 gal, or $133 in fuel. A vehicle loses about half its value in 3 years, so a $30k vehicle would lose $15k in value, or about $400/mo. Add in car washes, oil changes, new sets of tires, repairs, etc. and that could easily be another $150/mo. (clearly more some months than others). Car insurance could be another $100/mo.
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