One of the issues that contributes to excessive car use is that it’s not straightforward to calculate the cost of driving.
Once you have the car, the cost of each additional trip you take in it is obscured. Apart from tolls and fuel costs, many might see an already-paid-for car sitting in the driveway as “free”, making it an easy option. This is why good alternatives are not based around park and ride, but instead aiming to replace the entire trip, enabling households to own fewer cars.
I thought I’d have a go at calculating the total cost per kilometre of my car.
Obviously there are a lot of variables, so each person’s result will be a bit different.
Depreciation: The Lancer I bought last year cost me $18,000 new. If I assume it’ll be near-worthless by the time it gets 200,000 kms on the clock (I’m not actually likely to drive it that much while I have it, but later owners might), then that’s depreciation of 11.1 cents per kilometre.
Some of the other costs are annual fees, so the cost per kilometre will vary according to how much I drive. The Australian average is 15,000. We’re well below that in my family, though it’s increasing a bit since one son got his P-plates last month. I’m going to use 8,000 km as an estimate.
Insurance: $708.20. (It’s definitely gone up since having a P-plater behind the wheel!) That’s 8.9 cents per kilometre.
Registration: having just bought the car, it was paid for the first year, but ongoing annual cost is $816.50. That works out to 10.2 cents per kilometre.
Servicing: This will vary a lot, and will get more expensive as the vehicle gets older. But for now, because I bought a brand new car, this is capped at $230 for each of the first three years = 2.9 cents per kilometre.
Petrol: The car’s got an information display which can tell you various things. One is how many litres per 100 kilometres it’s burning. From my observation this usually varies between 6 and 10, depending on whether we’re driving on country freeways with little traffic, or start-stopping along a busy city road. (On the bright side it never gets driven in commuter peaks.) The official government number for a 2017 Lancer is 7.4, but let’s be a little pessimistic and use 8.
How much does petrol cost? The Australian Institute of Petroleum reckons in Victoria the average price in 2017-18 was 135.2 cents per litre, which seems roughly right, though I wonder if it’s creeping up.
So every 100 kilometres we’re using $10.816 of fuel, or 10.8 cents per kilometre.
What about tolls? We only use tollroads occasionally, perhaps about $50 per year, so I think I’ll exclude this for now.
So the cost for me is: Depreciation 11.1 + insurance 8.9 + rego 10.2 + servicing 2.9 + petrol 10.8 = 43.9 cents per kilometre.
(Contrast: public transport within Melbourne is generally $4.40 for any individual trip of up to 2+ hours, with a cap of $8.80 per day, but it gets a lot cheaper if you buy a Pass and use it regularly.)
Obviously there are a lot of costs that motorists don’t pay for directly. Driving is very heavily subsidised.
But having a number, even if it’s only an estimate, means I can quantify how much it’s costing each time we use the car.
Did I miss anything, or mess it up? What’s the cost in your household? Leave a comment!