July 25, 2012

Your Daily Commute - Time versus Money

[Note : when I first wrote this, I didn't really cover the difference in MPG that cars can get between city and highway driving.  If your car has good highway MPG then it can make sense to drive longer on the freeway and still save gasoline.  To do a smart comparison you should consider your vehicles city MPG versus highway MPG ]

A friend of mine used to commute to our job site by "taking the long way around' as I'd call it.   He wouldn't get off the first exit from the highway but he would instead drive on to the next exit then take a rural back road into work.   He felt this was quicker and no doubt it was.  Instead of driving 3-4 miles on the surface road and dealing with some stop lights, he could instead zip on down the highway then zip down the rural road.    I recently tried his route myself and it seemed to be a lot longer.   In fact I just checked it on Goggle maps and in fact he was driving about 2.2 miles extra.  Thats actually quite a lot of extra distance if you add up daily round trips over a year.   It may have saved him some time but it also cost him a lot of extra money on gasoline.

Lets estimate that my friends car got about 25 MPG.   Thats fairly average mileage for city/highway combined driving.   At 2.2 miles per trip my friend drove an extra 4.4 miles each day.  He would have to use about 0.176 gallons which would cost roughly 62¢ per day at a cost of $3.50 per gallon.   62¢ may not seem like a ton of money but if you do that for 250 days a year then it adds up to around $154 in extra gasoline.   Thats not counting anything for depreciation on your car either, which is certainly an extra expense.    Whether or not this is worth the extra cost really depends on how much time my friend saved and how much his time is worth to him. 

Consider this example :
I give Google two addresses.  One is my work site and another is a home in the area my wife and I would like to move to.

Google gives me two 3 alternate routes:
A) Mostly freeway - distance 12.5 miles, estimated time 21 minutes
B) All surface roads - distance 11.5 miles, estimated time 25 minutes
C) Half freeway and half surface roads - distance 11.6 miles and time 24 minutes

Taking the A route on the freeway is the quickest but also the longest.   Using route B would be a shorter distance but take 4 minutes longer.  

Basically we're looking at driving 1 mile further with option  A versus spending 4 minutes more time with option B.   Driving an extra mile costs you money but saves you time.

Gasoline for that 1 extra mile will cost you around 14¢ assuming 25MPG and $3.50 per gallon.  I would throw in another 10¢ per mile to cover depreciation on the car.   You're looking at 24¢ cost to save 4 minutes.    On an hourly rate that comes to a cost of about $3.60 per hour.   If your time is worth more to you than $3.60 per hour then it makes sense to spend the extra 24¢ in driving cost to drive that further route on the freeway and save yourself 4 minutes.   Of course the exact cost per mile depends on your car and the price of gasoline so it will vary quite a bit.  

Of course I wouldn't rely on just the Google map estimates of how long a route will take.   The traffic congestion may vary a lot and could substantially impact the time a route takes.   For example if I took that freeway route during rush hour then I could easily be looking at a 30 to 40 minute trip during a typical rush hour and if theres a traffic accident it could be far worse.   On the other hand surface streets can get pretty congested around here too so I may wait as much or longer in clogged roads.   You really have to test the traffic patterns yourself to tell how long a route takes.

How you value your own time depends on your situation.   A highly paid doctor should certainly value their time more than $3.60 per hour.   But if you're broke and struggling to make ends meet then driving a few minutes more to save 48¢ a day is probably worth it, even though its not even minimum wage rate.

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2 comments:

  1. I expect that you get a higher MPG on the freeway drive rather than the surface streets

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  2. Anon, thats a very good point and I didn't cover it in my discussion. I added a note to the article to point out that you should consider your cars city vs highway fuel efficiency. There are situations where driving more on the highway can save you gas compared to a shorter route through the city.

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