Author Topic: Eye opening calculation - cost of my car  (Read 3066 times)

Zaga

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Eye opening calculation - cost of my car
« on: March 08, 2014, 10:36:27 AM »
We just replaced my car in December, and I thought it would be a good idea to see how much my car was really costing me.  I included every expense - purchase price spread out over 170K miles, gas, maintenance, insurance, repairs (which there aren't any yet), and even car washes.  I figured if the spreadsheet is doing the hard work I'd check a bunch of calculations like cost/mile, miles/$, $/day, $/month, and of course gas mileage.

Wow, what an eye opener!  I bought a basic car, stick shift, base model Kia Soul, new.  I know that people around here say not to buy a new car, but buying a used Soul doesn't save that much, they are so inexpensive new that they just don't go down in value all that fast.  Buying used I would have had about the same cost per mile, but for a shorter length of time, and I want this car to last me until ER!

Anyways, I can see that my car is costing me about $0.29 per mile, and the amount I drive this is about $10 a day!  My goodness.  I don't see a way of changing this quickly, but in the long run I'd sure like to drive less!  At least DH and I carpool, I'd hate to pay double this just to get to and from work!  Though, we do have a second car with expenses, so we do pay more than $10/day to have cars, even though it isn't driven all that much.

Just thought this could be helpful to others about their car costs.  Once I have a year in with this car I'm going to add it all up to get an annual total, that will be sobering I'm sure.

MrCash

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Re: Eye opening calculation - cost of my car
« Reply #1 on: March 08, 2014, 10:48:03 AM »
Make sure you calculate the real cost incorporating your income tax rate as seen here:  Calculating Real Cost
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warfreak2

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Re: Eye opening calculation - cost of my car
« Reply #2 on: March 08, 2014, 10:57:39 AM »
That sounds like a silly adjustment to make to the calculation; rather, adjust your income to the after-tax rate. Of course, mustachians take advantage of pre-tax savings where possible, and don't spend as a proportion of their income.
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MrCash

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Re: Eye opening calculation - cost of my car
« Reply #3 on: March 08, 2014, 11:00:09 AM »
That sounds like a silly adjustment to make to the calculation; rather, adjust your income to the after-tax rate. Of course, mustachians take advantage of pre-tax savings where possible, and don't spend as a proportion of their income.

You can apply either adjustment, but you need to make sure to apply at least one or the other.  The good part about this adjustment is that it places more emphasis on not spending as much.
« Last Edit: March 08, 2014, 11:05:12 AM by MrCash »
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warfreak2

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Re: Eye opening calculation - cost of my car
« Reply #4 on: March 08, 2014, 11:08:24 AM »
Really it makes a lot more sense to just count income tax as another expense, rather than trying to split it evenly over the rest of your expenses. I could go over my grocery bills and increase each of them proportionally so that they include my rent, too, but I don't know why that would seem like a good idea.
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Zaga

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Re: Eye opening calculation - cost of my car
« Reply #5 on: March 08, 2014, 11:09:17 AM »
MrCash, I like that idea, but will be leaving it out of my calculation because it wouldn't change how much we are earning right now, so the taxes would be paid either way.

I do incorporate the tax adjustment when looking at savings rate though, and this is just one more expense that lowers my savings rate.

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Re: Eye opening calculation - cost of my car
« Reply #6 on: March 08, 2014, 11:52:09 AM »
Really it makes a lot more sense to just count income tax as another expense, rather than trying to split it evenly over the rest of your expenses. I could go over my grocery bills and increase each of them proportionally so that they include my rent, too, but I don't know why that would seem like a good idea.

This not really supposed to be a budgeting tool, but rather a way to determine how much something is costing you in terms of actual work (or in the words of Joseph R. Dominguez, your life energy).
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MrCash

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Re: Eye opening calculation - cost of my car
« Reply #7 on: March 08, 2014, 11:55:35 AM »
MrCash, I like that idea, but will be leaving it out of my calculation because it wouldn't change how much we are earning right now, so the taxes would be paid either way.

I do incorporate the tax adjustment when looking at savings rate though, and this is just one more expense that lowers my savings rate.

Yeah, I understand.  I just thought this was an interesting way to look at things.
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DaKini

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Re: Eye opening calculation - cost of my car
« Reply #8 on: March 08, 2014, 12:55:03 PM »
I would love to swap cars with you. Our car has also about 0.29, unfortunately its EUR and per kilometer.
To calculate it i made me a spreaddheet where i can enter costs based on time and on kilometer. Based on my projected yearly driving distance i can fairly good estimate the real cost.

Included is everything from tires, brakes, maintenance etc.
One time i also added the opportunity costs of the cars price invested, however as it was a saddening number and no car is (currently) no solution, i dropped it.

Eric

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Re: Eye opening calculation - cost of my car
« Reply #9 on: March 08, 2014, 01:39:12 PM »
Aren't you supposed to do that type of calculation before spending a crapload of money on a brand new car?  Also consider adding a column for opportunity cost to get the real cost.
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Zaga

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Re: Eye opening calculation - cost of my car
« Reply #10 on: March 08, 2014, 02:59:54 PM »
Aren't you supposed to do that type of calculation before spending a crapload of money on a brand new car?  Also consider adding a column for opportunity cost to get the real cost.
Oh, I did plenty of calculations before buying. This car is a clear improvement cost-wise over my old one. How do you suggest I would calculate opportunity cost?

destron

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Re: Eye opening calculation - cost of my car
« Reply #11 on: March 08, 2014, 03:26:34 PM »
Pretty shocking when you actually crunch the numbers.

I was having a discussion with a coworker the other day who drives a diesel Dodge RAM 3500 50 miles round trip to commute to our office. He was convinced that the cost to drive his truck was merely the cost of the gas because he had paid it off 2 years prior. When I pointed out that the cost of the vehicle should be amortized over its lifetime to get an accurate cost per mile, he disagreed because "that engine will last at least a million miles". I did get him to admit that insurance should be added in since he needed full coverage.

I actually made a calculator to calculate the cost of driving one mile: http://mustachecalc.com
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MrCash

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Re: Eye opening calculation - cost of my car
« Reply #12 on: March 08, 2014, 03:57:43 PM »
Aren't you supposed to do that type of calculation before spending a crapload of money on a brand new car?  Also consider adding a column for opportunity cost to get the real cost.
Oh, I did plenty of calculations before buying. This car is a clear improvement cost-wise over my old one. How do you suggest I would calculate opportunity cost?

I'm guessing that Eric is talking about the opportunity cost of investing the money instead. 
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Spork

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Re: Eye opening calculation - cost of my car
« Reply #13 on: March 08, 2014, 04:04:51 PM »
Pretty shocking when you actually crunch the numbers.

I was having a discussion with a coworker the other day who drives a diesel Dodge RAM 3500 50 miles round trip to commute to our office. He was convinced that the cost to drive his truck was merely the cost of the gas because he had paid it off 2 years prior. When I pointed out that the cost of the vehicle should be amortized over its lifetime to get an accurate cost per mile, he disagreed because "that engine will last at least a million miles". I did get him to admit that insurance should be added in since he needed full coverage.

I actually made a calculator to calculate the cost of driving one mile: http://mustachecalc.com

If you can convince him to drive it for that million miles (instead of replacing it at 100k and buying another $50k truck) then you've at least got him halfway there.

Amortization is technically proper... but (IMO) it only seriously bites you on the ass when you buy an expensive car, drive it for 4 years and replace it.  (As an aside: 50 miles a day on a bigass Cummins engine is a pretty serious chunk of change in and of itself.)

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Re: Eye opening calculation - cost of my car
« Reply #14 on: March 08, 2014, 04:11:44 PM »
Pretty shocking when you actually crunch the numbers.

I was having a discussion with a coworker the other day who drives a diesel Dodge RAM 3500 50 miles round trip to commute to our office. He was convinced that the cost to drive his truck was merely the cost of the gas because he had paid it off 2 years prior. When I pointed out that the cost of the vehicle should be amortized over its lifetime to get an accurate cost per mile, he disagreed because "that engine will last at least a million miles". I did get him to admit that insurance should be added in since he needed full coverage.

I actually made a calculator to calculate the cost of driving one mile: http://mustachecalc.com

Cool site!  I'll have to play around with it some more when I get some time.
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Rural

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Re: Eye opening calculation - cost of my car
« Reply #15 on: March 08, 2014, 04:23:06 PM »
Pretty shocking when you actually crunch the numbers.

I was having a discussion with a coworker the other day who drives a diesel Dodge RAM 3500 50 miles round trip to commute to our office. He was convinced that the cost to drive his truck was merely the cost of the gas because he had paid it off 2 years prior. When I pointed out that the cost of the vehicle should be amortized over its lifetime to get an accurate cost per mile, he disagreed because "that engine will last at least a million miles". I did get him to admit that insurance should be added in since he needed full coverage.

I actually made a calculator to calculate the cost of driving one mile: http://mustachecalc.com

I love the calculator, but I do wish that it allowed us to input number of miles on the odometer upon purchase. :-) It assumes a new car purchase. I adjusted by setting the expected lifetime miles equal to how many I think I will add to it, but that takes a little bit of doing.

Anyway, cheap used car, self-maintained. Costs me $.14 a mile and $2,140 a year.

destron

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Re: Eye opening calculation - cost of my car
« Reply #16 on: March 08, 2014, 06:53:45 PM »
I love the calculator, but I do wish that it allowed us to input number of miles on the odometer upon purchase. :-)

Anyway, cheap used car, self-maintained. Costs me $.14 a mile and $2,140 a year.

Lifetime miles in this calculator is meant to be how many miles you expect to drive the car for -- so if you buy it with 75k and sell at 275k, that's 200k miles. Perhaps I can make it more clear in the future :).

I have considered adding another row, but increasing the rows per calculator makes it more complicated and difficult to use in another way.

Nice job on the inexpensive car!
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Rural

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Re: Eye opening calculation - cost of my car
« Reply #17 on: March 09, 2014, 06:27:54 AM »
I love the calculator, but I do wish that it allowed us to input number of miles on the odometer upon purchase. :-)

Anyway, cheap used car, self-maintained. Costs me $.14 a mile and $2,140 a year.

Lifetime miles in this calculator is meant to be how many miles you expect to drive the car for -- so if you buy it with 75k and sell at 275k, that's 200k miles. Perhaps I can make it more clear in the future :).

I have considered adding another row, but increasing the rows per calculator makes it more complicated and difficult to use in another way.

Yes, that makes sense. I did put in the miles I expect I'll be able to drive the car (and sale value at what the scrapyard offers), so I guess it is easy enough to figure out. :-)

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Re: Eye opening calculation - cost of my car
« Reply #18 on: March 09, 2014, 06:53:03 AM »
did you say "even car washes"?!?!...you mean the cost of a couple gallons of water and the 1 time cost of sponge?  you don't really wait in lines at a car wash to pay money to have a machine spray water at your car, do you?  You could just leave it outside in the rain and get it washed for free.

Zaga

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Re: Eye opening calculation - cost of my car
« Reply #19 on: March 09, 2014, 07:02:00 AM »
did you say "even car washes"?!?!...you mean the cost of a couple gallons of water and the 1 time cost of sponge?  you don't really wait in lines at a car wash to pay money to have a machine spray water at your car, do you?  You could just leave it outside in the rain and get it washed for free.
In the winter when the salt is all over and I need to wash the undercarriage of salt, yes, I use the car wash in town to get the underside clean.  I've had a perfectly good car that would have lasted me another 50K miles at least rust out on me at 190K, and I'd really like to avoid that in the future.  Plus it's been crazy cold up here this winter, I will be washing at home come warmer temps and the end of road salt in another few weeks.

Another thing I should add, I was super conservative with my estimates of how long I'll be driving this car.  I put only 170,000 miles into the calculator, with no resale value.  Also, I ignored the money I got out of my old car I sold.  I certainly hope for this car to last me longer than that and/or to be worth something when I go to sell it!
Aren't you supposed to do that type of calculation before spending a crapload of money on a brand new car?  Also consider adding a column for opportunity cost to get the real cost.
Oh, I did plenty of calculations before buying. This car is a clear improvement cost-wise over my old one. How do you suggest I would calculate opportunity cost?

I'm guessing that Eric is talking about the opportunity cost of investing the money instead. 
Okay, I guess that makes sense.  There isn't as much of that as you would think though, my old car was costing a lot more in gas, repairs, and maintenance.  Plus whenever it was down for repairs (far too often) we had to drive the other car to work - a gas guzzler SUV that we generally use just for hauling. 

We probably would have maxed the second Roth last year if we had delayed this purchase though.  This year we both have 401-K's again, and are putting in the max for each of us.  That, plus debt paydown, will be all of our savings this year, planning to improve on last year's 44% rate by at least a little bit.

Fastfwd

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Re: Eye opening calculation - cost of my car
« Reply #20 on: March 11, 2014, 05:51:00 AM »
The tricky thing about cars is that some of it is a need and some of it is a want. Also costs are spread in multiple categories and time.

Cost of the car can be huge if paid in cash or seem little when financed over many years.
Fuel always seems bad when you fill up but you don't notice it until you look at the trip distance and then multiply by price per km.
Tires are surprisingly expensive. I think I spent more on tires last year than on gas.
Maintenance is very random. One year you will do 2 oil changes and nothing else. The next year a 1000$ repair comes up.
Insurance for me is combined for car and house so it appears as a house expense in my budget.

I absolutely NEED 2 cars for work and kids. Different schedules and kids too young to get to school by themselves, no bus transport.

I made myself a chart of the 2 cars I own with actual costs and expected costs over 7 years. I buy cars 3-4 years old and sell them when about 10 years old.
I then added to the chart other smaller and cheaper cars I could use to compare.
Turns out that over 7 years the yearly costs difference would not be that significant. Enough to choose a different car next time but not enough for the trouble to change cars.
Getting an hybrid would be worse than getting a small normal car.
Fuel is only a small part vs car price+insurance+tires+maintenance so for us it is still a good move to keep buying 4x4. Maybe just something smaller like a subaru.

Right now cars are my 2nd more expensive category after food. In retirement it will be minimal if we move to the city and just subscribe to a car sharing service. Probably go from 10k+/year to less than 1-2k.

enderland

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Re: Eye opening calculation - cost of my car
« Reply #21 on: March 11, 2014, 06:05:04 AM »
Yup, it's depressing if you drive a lot to calculate how expensive it actually is.

This year I started a separate checking account for all car related expenses - purchases, maintenance, gas. I put $500/month in it right now. Unfortunately, it looks like your calculator rather agrees with me - it says I'm at 29 cents/mile which is close to my $500 mark right now.

Just further incentive to move closer to work in a few years when it makes more sense...

Thegoblinchief

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Re: Eye opening calculation - cost of my car
« Reply #22 on: March 11, 2014, 06:24:05 AM »
My car is closer to $0.40/mile. This is why I bike as much as possible, and the kids and I focus our "field trips" as much as possible within walking distance. Vacations aside, I put less than 2K miles on my car (1 weekly errand run, 1 weekly longer field trip when weather is nicer, doctor visits, that's about it). I use it so little in the winter I had to buy a battery charger/maintainer to keep it from dying in the cold.

If I had no kids, I would've already sold my car even though it's worthless. I'm more than happy biking everywhere in all weather. I appreciate all of the engineering that goes into cars, but they're dumb.
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dcheesi

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Re: Eye opening calculation - cost of my car
« Reply #23 on: March 11, 2014, 06:50:22 AM »
Tires are surprisingly expensive. I think I spent more on tires last year than on gas.
[...]
Fuel is only a small part vs car price+insurance+tires+maintenance so for us it is still a good move to keep buying 4x4. Maybe just something smaller like a subaru.
There are always tradeoffs, and this could be an example. Supposedly Subaru's AWD transmissions are extremely finicky when it comes to maintaining equal tread depth, which could mean spending more on tires in the long run (have to replace all 4 even if just one is bad).

Zette

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Re: Eye opening calculation - cost of my car
« Reply #24 on: March 11, 2014, 06:59:30 AM »
It was interesting to play with the calculator, varying initial price and yearly miles.  The fewer miles I drove, the greater the cost/mile, but the smaller the cost/year.  Basing the numbers on my current car (an SUV purchased for $35k 9 years ago), if I had spent the same amount on a car that got better gas mileage (35 instead of 20 mpg), it would've saved about $1k/yr.  If I had spent $20k instead of $35k it would've saved another $1k/yr.  Reducing yearly miles from 12k to 8k saved $1.7k/yr.

Still, the lowest realistic number I came up with was $2,800/yr.  The highest was $6,900/yr.  Bicycling everywhere (and the major changes necessary to set up my life to accomplish that) does not appeal to me, so $3-7k/yr for the convenience of a car falls into the "things worth paying for" category IMO.

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Re: Eye opening calculation - cost of my car
« Reply #25 on: March 11, 2014, 07:02:33 AM »
Bicycling everywhere (and the major changes necessary to set up my life to accomplish that) does not appeal to me, so $3-7k/yr for the convenience of a car falls into the "things worth paying for" category IMO.

Right there with you but it's not all or nothing.

For example one of my weekly ritual is to grab a coffee each saturday evening with a friend. After looking at MPG and distance I realized that I spent more on gas than coffee for that trip. I will keep doing it but will probably bike there on nice summer days.

I'm definitely not going to start grocery shopping by bike.

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Re: Eye opening calculation - cost of my car
« Reply #26 on: March 11, 2014, 07:53:31 AM »
According to the calculator, I will drive my car (a Honda Fit) for 50 years @ 42 cents per mile!

I only drive about 3,000 miles per year, so that's $1,260 per year.

Even if I could somehow keep driving to age 106, the car will most likely disintegrate before then. Plus, perhaps we will have better alternatives for transportation in the next generation.

Zaga

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Re: Eye opening calculation - cost of my car
« Reply #27 on: March 11, 2014, 07:59:37 AM »
Yeah, unfortunately we're not in any sort of place in our lives to reduce car usage more than we already have.  But I do find value in knowing exactly what my economy car IS costing me.  Just looking at monthly cash outlay is misleading, so I'm glad I did this calculation to see the total costs. 

At least 90% of the time we drive into work together in the small car, we go to after work things together like Dr. appointments and community theater (where we volunteer a lot).

destron

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Re: Eye opening calculation - cost of my car
« Reply #28 on: March 11, 2014, 10:45:31 PM »
According to the calculator, I will drive my car (a Honda Fit) for 50 years @ 42 cents per mile!

I only drive about 3,000 miles per year, so that's $1,260 per year.

Even if I could somehow keep driving to age 106, the car will most likely disintegrate before then. Plus, perhaps we will have better alternatives for transportation in the next generation.

Your cost per miles goes up if you don't drive much because some fixed costs (mostly insurance) do not change. However, you should take into account lowering insurance costs over time. After you have had the car for long enough it makes sense to drop complete coverage.
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destron

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Re: Eye opening calculation - cost of my car
« Reply #29 on: March 11, 2014, 10:48:19 PM »
Bicycling everywhere (and the major changes necessary to set up my life to accomplish that) does not appeal to me, so $3-7k/yr for the convenience of a car falls into the "things worth paying for" category IMO.

Right there with you but it's not all or nothing.

+1

Many people have a difficult time without owning a car, but many of us can also reduce the amount we have to drive by bicycling.

My personal situation: I bicycle commute to work, only 5 miles each way. How am I so lucky to have such a short commute? I moved so that I could do this. I still own a car to go to the mountains or take my dog places.

I do my grocery shopping around 50% on the bike or walking though! And, I couldn't feel better.
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Re: Eye opening calculation - cost of my car
« Reply #30 on: March 11, 2014, 10:49:01 PM »
According to the calculator, I will drive my car (a Honda Fit) for 50 years @ 42 cents per mile!

I only drive about 3,000 miles per year, so that's $1,260 per year.

Even if I could somehow keep driving to age 106, the car will most likely disintegrate before then. Plus, perhaps we will have better alternatives for transportation in the next generation.

Your cost per miles goes up if you don't drive much because some fixed costs (mostly insurance) do not change. However, you should take into account lowering insurance costs over time. After you have had the car for long enough it makes sense to drop complete coverage.

And it's not great for a car to sit for extended periods of time.  http://jerseycash4cars.com/articles/Sitting_Car_Problems.pdf
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Re: Eye opening calculation - cost of my car
« Reply #31 on: March 12, 2014, 10:46:16 AM »
We just replaced my car in December, and I thought it would be a good idea to see how much my car was really costing me.  I included every expense - purchase price spread out over 170K miles, gas, maintenance, insurance, repairs (which there aren't any yet), and even car washes.  I figured if the spreadsheet is doing the hard work I'd check a bunch of calculations like cost/mile, miles/$, $/day, $/month, and of course gas mileage.

Wow, what an eye opener!  I bought a basic car, stick shift, base model Kia Soul, new.  I know that people around here say not to buy a new car, but buying a used Soul doesn't save that much, they are so inexpensive new that they just don't go down in value all that fast.  Buying used I would have had about the same cost per mile, but for a shorter length of time, and I want this car to last me until ER!

Anyways, I can see that my car is costing me about $0.29 per mile, and the amount I drive this is about $10 a day!  My goodness.  I don't see a way of changing this quickly, but in the long run I'd sure like to drive less!  At least DH and I carpool, I'd hate to pay double this just to get to and from work!  Though, we do have a second car with expenses, so we do pay more than $10/day to have cars, even though it isn't driven all that much.

Just thought this could be helpful to others about their car costs.  Once I have a year in with this car I'm going to add it all up to get an annual total, that will be sobering I'm sure.

I got similar numbers on my own little car when I ran them last year.  Since at that point I was essentially walking everywhere I needed to go, I just sold it and was done.

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Re: Eye opening calculation - cost of my car
« Reply #32 on: March 12, 2014, 11:39:52 AM »
Hmm.  Mine works out to $0.18 with insurance.  Not terrible I guess.

I think the calculator should factor in a % increase yearly of gas prices (5%?).  It should also show the time-value of the money spent in an x% interest account. 

Very nice site.  I wish I knew how to make calculators like that - I have a plethora of them I'd build for car related stuff (racing, not financial).

According to the calculator, I will drive my car (a Honda Fit) for 50 years @ 42 cents per mile!

I only drive about 3,000 miles per year, so that's $1,260 per year.

Even if I could somehow keep driving to age 106, the car will most likely disintegrate before then. Plus, perhaps we will have better alternatives for transportation in the next generation.

Well, if you could keep the car 50 years in reasonable shape, its value would likely increase quite a bit :)  Just look at the value of a clean Japanese car from the 60s or 70s.

oldtoyota

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Re: Eye opening calculation - cost of my car
« Reply #33 on: March 12, 2014, 12:00:31 PM »


I actually made a calculator to calculate the cost of driving one mile: http://mustachecalc.com

I looked at your calculator. What is "vehicle cost" versus "sales price"? Is the first one what we paid for our car and the second what we could sell it for? I figure that can't be right, but I am not sure what else it means.

Mykl

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Re: Eye opening calculation - cost of my car
« Reply #34 on: March 12, 2014, 12:38:31 PM »
Hmm.  Mine works out to $0.18 with insurance.  Not terrible I guess.

This is nowhere near terrible, $.18/mile with insurance is amazingly cheap.  Where I'm at, with a vehicle that gets an average of 30 mpg it costs $.11/mile just to fuel it.

Mykl

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Re: Eye opening calculation - cost of my car
« Reply #35 on: March 12, 2014, 01:06:09 PM »
With a vehicle I purchased brand new in 2009 that I have put 77,XXX miles on, I'm sitting right at $.60/mile.  This is with everything considered, from the intial purchase price of the vehicle, to maintenance, fuel, and insurance.

That should be on the high side for car owners around here because I purchased the vehicle as much for personal enjoyment as I did to fill a need.  So I wasn't looking for pure efficiency, I was looking for reasonable efficiency that put a smile on my face every day I operate it.

Subtracting the initial purchase price the car costs me roughly $.24 per mile to operate, and that's including a very generous number devoted to maintenance and care.  Given that I've committed to owning this vehicle for many more years to come, I consider $.24 per mile to be worth the slight premium since I like the car.

My best guess at opportunity cost is about a $.08 per mile penalty, under the assumption of average returns from an S&P 500 index fund.  The problem with speculating here is that if I were to use the extra room in my budget to invest that $.08 number starts to go down.  Given that I did actually use the extra room in my budget to pay more towards the principle on my house, that $.08 is probably closer to $.05.  But again, it's really hard to say because of the difficult to define nature of opportunity cost.  Because if this is something we're going to consider, I'm reducing that number by another $.02 because buying brand new allowed me to forego the experience of spending hours of searching and driving and testing and inspecting whatever used vehicles I'd have purchased instead, because under opportunity cost...  my personal time has value.
« Last Edit: March 12, 2014, 01:27:24 PM by Mykl »

prodarwin

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Re: Eye opening calculation - cost of my car
« Reply #36 on: March 12, 2014, 01:45:21 PM »
Hmm.  Mine works out to $0.18 with insurance.  Not terrible I guess.

This is nowhere near terrible, $.18/mile with insurance is amazingly cheap.  Where I'm at, with a vehicle that gets an average of 30 mpg it costs $.11/mile just to fuel it.

My car gets about 30mpg (30.4 lifetime avg, 29.4 rolling avg).  Its cost me $0.115/mile in fuel.  The rest is repairs and depreciation.  Its cheap, but not exceptionally cheap.  My beater before this cost approx $0.11/mile.  Thre are probably plenty of 1G Insight and 2G Prius owners right around $0.10/mile

If I keep this another few years I could see the cost dropping under 0.15 pretty easily.

Mykl

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Re: Eye opening calculation - cost of my car
« Reply #37 on: March 12, 2014, 05:36:19 PM »
My car gets about 30mpg (30.4 lifetime avg, 29.4 rolling avg).  Its cost me $0.115/mile in fuel.  The rest is repairs and depreciation.  Its cheap, but not exceptionally cheap.  My beater before this cost approx $0.11/mile.  Thre are probably plenty of 1G Insight and 2G Prius owners right around $0.10/mile

If I keep this another few years I could see the cost dropping under 0.15 pretty easily.

This is awesome.  I'd like to get my numbers this low, but when cars are a hobby and you spend a extra to run yours at race track every now and then, your "transportation need" versus "hobby" numbers sort of start to get smooshed together.   Ideally I would have made a different decision when I purchased my current vehicle, but playing with the cards I chose to hold I am where I am.

When I've got more time on my hands later in life I'll be able to separate the basic transportation side from the hobby side, but right now it's just not feasible.
« Last Edit: March 12, 2014, 05:41:30 PM by Mykl »

prodarwin

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Re: Eye opening calculation - cost of my car
« Reply #38 on: March 12, 2014, 07:07:40 PM »
When I've got more time on my hands later in life I'll be able to separate the basic transportation side from the hobby side, but right now it's just not feasible.

This is what I do.  I'm sure my operating costs on the "race" car are not nearly as low.

Jack

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Re: Eye opening calculation - cost of my car
« Reply #39 on: March 12, 2014, 08:53:27 PM »
Okay, I guess that makes sense.  There isn't as much of that as you would think though, my old car was costing a lot more in gas, repairs, and maintenance.  Plus whenever it was down for repairs (far too often) we had to drive the other car to work - a gas guzzler SUV that we generally use just for hauling.

My gas guzzler* truck, which I drive to work right now because my efficient car is broken, still only manages to cost $0.29 per mile. I still come out ahead with older cars, even including when they break.

*It's a 4-cylinder Ranger -- for me anything under 30 mpg is a "gas guzzler"

Zaga

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Re: Eye opening calculation - cost of my car
« Reply #40 on: March 13, 2014, 05:14:48 AM »
Jack, our gas guzzler is a Tahoe.  Fortunately it will often go over a week between uses, cause it's expensive to run!  We did get an awesome deal on it when we bought it though, we got it with half of its useful (in my estimation) life left for less than 1/4 the new price.

going2ER

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Re: Eye opening calculation - cost of my car
« Reply #41 on: March 13, 2014, 07:40:07 AM »
I am just getting stated on the MMM path and would be afraid to calculate the cost of the truck I drive daily to work. We do only have one vehicle and chose this one for its hauling weight. DH does normally walk to work, if its really bad out I drop him off. I am required to have a vehicle for work so I do get a monthly allowance + km reimbursement. We are planning on saving some funds for a second more fuel efficeinet vehicle for me to drive. Reading this makes me want to move up the purchasing time of a second vehicle for what it would save in gas, but then makes me question once we add insurance and maintenance whether it is worth it.

Fastfwd

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Re: Eye opening calculation - cost of my car
« Reply #42 on: March 13, 2014, 07:47:35 AM »
Reading this makes me want to move up the purchasing time of a second vehicle for what it would save in gas, but then makes me question once we add insurance and maintenance whether it is worth it.

You definitely have to look at it as a whole cost. Maybe MPG is bad but will a better MPG car be worth it vs financing a newer car with higher depreciation? Easier when trading a same year/mileage car but just smaller more efficient model.

Even here in Quebec where electricity is really cheap hybrids or full electrics make no sense. You spend less money driving a slightly bigger economy 4 cylinder car.

My "car" is a 7000lbs truck that does 15MPG highway on a very good day; closer to 12MPG right now. But I drive it only to get the kids to school and me to the train during winter. During summer it will pull a fifth wheel trailer so it's part transportation and part vacation budget.

Spork

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Re: Eye opening calculation - cost of my car
« Reply #43 on: March 13, 2014, 07:50:44 AM »
We are planning on saving some funds for a second more fuel efficeinet vehicle for me to drive. Reading this makes me want to move up the purchasing time of a second vehicle for what it would save in gas, but then makes me question once we add insurance and maintenance whether it is worth it.

I'd guess (and this is JUST A GUESS) that it isn't worth it in dollars.  (You may or may not have other personal reasons that does make it worth it). 

I got rid of a fuel pig truck about a year ago... and it was about a 2 year payback on the gas (going from 14mpg->31mpg).  I replaced with a pretty cheap used car and with no financing and no comprehensive insurance.  If I had to add that in, the payback would be significantly longer.  Of course, the price of gas could also change that equation.

Bottom line: put it in a spreadsheet and figure it out.  It might make sense.  It might not.

mic575

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Re: Eye opening calculation - cost of my car
« Reply #44 on: March 13, 2014, 08:46:59 AM »


A few minutes ago I had someone say to me "I thought you would drive a nicer car!".  They apparently saw me the other day.  It kind of surprised me and I will shamefully admit that it made me feel a bit bad.  I guess in part because my 12 year old car looks/runs really good but I guess its still a 12 year old car. 

The other part of me thought, great, success I'm doing what I'm supposed to be doing to reach FI. 

Zaga

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Re: Eye opening calculation - cost of my car
« Reply #45 on: March 13, 2014, 10:09:04 AM »


A few minutes ago I had someone say to me "I thought you would drive a nicer car!".  They apparently saw me the other day.  It kind of surprised me and I will shamefully admit that it made me feel a bit bad.  I guess in part because my 12 year old car looks/runs really good but I guess its still a 12 year old car. 

The other part of me thought, great, success I'm doing what I'm supposed to be doing to reach FI.
Yep, DH is in IT, and his coworkers made a bit of fun of him when he said our new car was a base model Soul.  Obviously we could have "afforded" a much nicer car by their standards!

MrCash

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Re: Eye opening calculation - cost of my car
« Reply #46 on: March 13, 2014, 10:29:52 AM »


A few minutes ago I had someone say to me "I thought you would drive a nicer car!".  They apparently saw me the other day.  It kind of surprised me and I will shamefully admit that it made me feel a bit bad.  I guess in part because my 12 year old car looks/runs really good but I guess its still a 12 year old car. 

The other part of me thought, great, success I'm doing what I'm supposed to be doing to reach FI.
Yep, DH is in IT, and his coworkers made a bit of fun of him when he said our new car was a base model Soul.  Obviously we could have "afforded" a much nicer car by their standards!

I don't think most people really understand what the word afford means.
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destron

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Re: Eye opening calculation - cost of my car
« Reply #47 on: March 14, 2014, 08:05:26 AM »
his coworkers made a bit of fun of him when he said our new car was a base model Soul.  Obviously we could have "afforded" a much nicer car by their standards!

I don't think most people really understand what the word afford means.

It is interesting that the word afford (and other words that we often discuss here) bring up different responses for different people and reveal a lot about you. Afford, can mean I have enough money to purchase this thing. It can also mean I have enough money to make monthly payments on this thing. It can also mean, I have enough money that this will not inhibit my long term financial plans. Each way shows a different level of meta understand of personal finances.
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destron

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Re: Eye opening calculation - cost of my car
« Reply #48 on: March 14, 2014, 08:06:52 AM »


I actually made a calculator to calculate the cost of driving one mile: http://mustachecalc.com

I looked at your calculator. What is "vehicle cost" versus "sales price"? Is the first one what we paid for our car and the second what we could sell it for? I figure that can't be right, but I am not sure what else it means.

You are correct. Vehicle cost is your purchase price. I think I should change the language since that is more clear. You need to know the purchase price and sale price to depreciate the car properly on a per mile basis.
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Mykl

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Re: Eye opening calculation - cost of my car
« Reply #49 on: March 14, 2014, 08:25:00 AM »
It is interesting that the word afford (and other words that we often discuss here) bring up different responses for different people and reveal a lot about you. Afford, can mean I have enough money to purchase this thing. It can also mean I have enough money to make monthly payments on this thing. It can also mean, I have enough money that this will not inhibit my long term financial plans. Each way shows a different level of meta understand of personal finances.

Yeah, and while my wife is all on board the "lets spend as little as reasonably possible for as much as we can" even she is sensitive when I say we can't "afford" something that we clearly have the actual funds to purchase.  I'm slowly trying to rewire the meaning of that word in her head to associate it with our budget as opposed to potential cash flow.