May 5, 2015

I've Paid About 48¢ Per Mile to Drive My Car


I've owned my car now for over 8 years.    In that time I've just now hit 70,000 miles total.   I paid a little over $14,000 for it in 2007 and its worth around $4000 today.

I'm estimating my expenses but I'm probably pretty close in my estimates.    I figure this is likely correct within 10%.    I just don't have detailed accurate records of everything I've spent for 8 years, so I'll have to estimate.

The depreciation I figured using the current private party sales estimate value from Edmunds versus what I paid originally 8 years ago.

I figured gasoline costs based on using historical numbers for our city off of Gasbuddy.com     Those numbers are going to be a bit inflated since they're using the city average value and I pay below average prices for my gas.    For example right now the city average is about $2.90 and the station I go to has gas for $2.71.   

The costs for insurance, oil changes, tires, repairs & maintenance and taxes are all estimates based on my memory and there is more margin for error in these categories.  

Lastly I added a figure for the opportunity cost which is based on figuring 4% interest on the original ~$14,000 purchase price over 8 years.  I'm pretty sure I could have made 4% with that money.

Here's the summary of costs over the years and the totals :

depreciation  $     10,000
insurance  $       5,600
gas   $     10,182
oil changes  $          560
tires  $          500
repairs/maint  $       1,500
tax  $          400
opportunity cost  $       4,544
TOTAL $33,286
per mile $0.476


So the total cost there is $0.476 per mile or roughly 48¢.

Thats more than I'd have guessed.      

If I'd done a very quick almost off the top of my head calculation I think I'd have come up with about 30¢ per mile cost.   That would have been based on the $10,000 in depreciation, figuring "a couple thousand more for other stuff" and then guessing a price of $2.70 for gasoline.      I would have underestimated the cost of insurance and the opportunity cost.   And I apparently remembered the price of gas wrong over the past eight years, most likely because my memory is biased towards what I paid last week for gas more than 7 years ago.

--

2 comments:

  1. I kept exact records of the cost of owning my 97 Camry from when I bought it in October 2009 to when I traded it in in May 2012 and the total cost came to 16.8 cents per mile. I didn't include opportunity cost but I did include all the other costs you counted plus car washes and parking. My lower cost per mile was mainly due to a lower purchase price and lots of miles driven each year.

    ReplyDelete
  2. Andy,

    16.8 cents is very good.

    Driving more certainly helps keep the average cost/mile down. I don't drive too much really. If I drove twice as much I figure my average would be at about 34 cents.

    Jim

    ReplyDelete

I'm starting to get too many spam messages in the comments so I'm turning on moderation. Please be patient and wait for your comment to be approved. Note it may take up to a few days for approval, thanks.

Blog Widget by LinkWithin