The other day I started doing the math on the savings. I'm 3.5 miles from work, so I estimate that I save about $0.75/day on gas. My car just ticked over 200k miles (woot!), so there's a decent chance I'll need to replace it in a few years. Let's say I plan to spend $5k on my next car. Every day I ride my bike to work means that I can delay that purchase by 1 day. Assuming a 200-day work year, each biking day saves 0.5% of the returns on that $5k. 7% return on $5k is $350/year, divided across 200 days means $1.75/day additional savings by riding my bike to work. With the gas savings, I'm up to $2.5/day after taxes.

Last year I bought an old clunker of a bike for $20, put new tires on it, rode it to work a few dozen times, and sold it for $20. It paid for itself easily. This year, I have a slightly younger, much less clunky bike that I bought for $65, and I'm on my way to biking way more than last year, since it's more comfortable to ride. It hasn't (yet) paid for itself, but it certainly will.

The additional exercise is a nice bonus too, since I'm pretty lousy at motivating myself to exercise on my own.