I got to thinking lately how everyone lately is talking about saving money by clipping coupons, but no one seems to be talking about longer term, larger expenses as much, such as transportation.  According to HUD, 60% of household income is spent on housing and transportation.  Considering that transportation is the second highest bill in a household, it's worth seeing if a viable, cheaper alternative is available.

 

How to reduce transportation costs.  I've considered several types of methods for a person to get around.  I've included a hybred car, manual transmission car, automatic transmission car, motorcycle, and public bus.  All the cars listed are Honda Civics for simplicity.  It is comparing apples to apples.

 

What I've found.  Here is the quick rundown on lifetime costs of transportation, including purchase price, assuming all vehicles can drive 200,000 miles during its life, during a period of 10 years.

 

Honda Civic Hybred:                                         $42,473.53

Honda Civic DX (manual transmission):         $42,171.67

Honda Civic DX (automatic transmission):    $42,534.51

Honda CRF203L Motorcycle:                          $13,601.15

Monthly Bus Passes, 10 years:                          $9,360.00

 

How I made my calculations.  In order to calculate these numbers, I made the following adjustments and assumptions:

    1.  Personal property taxes, insurance, maintenance, and interest payments are not included for vehicle costs.  These were too widely variable to add.  Personal property tax is typically added by your local government, if your local government has personal property tax for vehicles at all.  Vehicle insurance swings wildly depending on your marital status, age, driving record, state you live in, and credit score.  Finally, maintenance can also very wildly between 2 cars of the same make and same usage.  Several figures I came across claim a car costs about $2,000 a year in repairs, a figure I consider too high.  Again, interest payments are too unwieldy, since your debt load, credit score, and special offers on vehicles determine how much you pay in interest.

     2.  I figured gas price averages $4 a gallon for the 10 year period.  While gas is currently less than $2.50 nation wide, the average would be $4 by the time 10 years has rolled by.

     3.  It assumes you completely replace one mode of transportation with another.  Replacing a 2nd car with a bus pass, for example.

   

Who really benefits from this information.  Pretty much, anyone who is single, or anyone married who is thinking about doing away with a 2nd vehicle.  Married couples will need at least one car to help their household function, such as getting groceries or moving a family about.

 

Want to try your own figures?  I've made a Vehicle Comparison Excel Spreadsheet that you can download and use your own figures to calculate transportation expenses. 

 

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