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Drive less, save a lot of money

Sunday, November 8th, 2009

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Transportation is one of the largest parts of most people’s carbon footprint.  Unfortunately, it’s also one of the hardest behaviors to change.

A new study1,2 by Daniel Feiler and Jack Soll in this week’s Online First edition of Climatic Change, “A blind spot in driving decisions: how neglecting costs puts us in overdrive” suggests that if we accounted for the costs of driving, this could be the incentive we need to reduce mileage (another example of framing climate change in terms of personal finance).

Our driving costs are surprisingly high…

For example, they quote a study by the auto club AAA—Your driving costs—showing the total cost to drive a medium sedan 15,000 miles in 2008 (with an average fuel cost of $2.30/gallon) is 54 cents/mile.  On a per-mile basis, costs break down to:

  • operating costs (gas, maintenance, tires): 15.92 cents/mile
  • depreciation: 22.67 cents/mile (this number differs from the one the study used; I think they miscalculated it based on the AAA data)
  • insurance: 6.38 cents/mile
  • license, taxes, registration: 3.81 cents/mile
  • loan finance charge: 5.24 cents/mile

If you do the math, the average person driving 15,000 miles per year pays

  • $8,100/year for the total costs of car ownership and driving
  • $5,788/yr for operating costs plus depreciation (depreciation is included here because it usually goes up with mileage)
  • $2,388 for operating costs alone

The authors argue that there are two reasons why people drive more than they would if they were aware of the full costs of driving:

  1. Gas purchases are not linked to each trip.  We usually buy a whole tank of gas and then make many trips rather than filling up before each trip with an exact amount of gas sufficient for just that trip.  This would be a real inconvenience, but it would make more transparent the fuel cost for each trip, especially longer-distance ones.
  2. It’s onerous to calculate the costs per trip, and most people don’t take the time to do this.

However, in tests where people made these calculations, they indicated that they would drive less once they knew the costs.

So how do we make this easier in practice?

  • The availability of web-based tools like Mapquest make it easy to calculate trip distances.
  • Using a rough rule of thumb (rounded numbers) of 50 cents/mile for total costs, 15 cents/mile for operating costs, and 20 cents/mile for depreciation makes it easier to do the mental calculation of each trip.
  • By providing per-mile estimates of costs like the AAA does, messaging can be developed:  “If you drive 30 miles to a grocery store instead of a local one one mile away, this costs an extra $11.19 per trip.”
  • Encourage families (that are able to do so) to eliminate a car.  This would save $2,315/yr in just the costs of insurance, taxes and registration, and loan finance charges.

Related posts:

1Feiler, D. and J. Soll (2009) A blind spot in driving decisions: how neglecting costs puts us in overdrive. Climatic Change (Online First)

2Bowdoin people can access the article here.

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Photo credit:  http://www.flickr.com/photos/iceninejon/ / CC BY-NC-ND 2.0

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