Hacker News Reader

Comment by robertnealan | Hacker News Reader

Several years ago I asked my mom why she lived so far from where she worked (Vallejo, CA to San Ramon, CA), and she claimed they were saving money on cheaper rent. Five minutes of napkin paper math later I pointed her and her partner were spending roughly $700/month commuting in gas, bridge toll, and basic wear+tear on their vehicles (based on ~$0.45/mile).

It seems like most people don't account for vehicle costs when accounting for cost of living. Why I'm not positive, though it seems to just be the general abstractness of the cost spread out over time, and the assumption in America that you're going to drive everywhere anyway so it doesn't matter.

Even worse we see this with numerous Uber/Lyft/delivery "contractors" who are putting endless miles on their personal vehicles without accounting for the inevitable cost of replacing them.

View on HN

Why $.45/mile? Is that real? I keep track of all my expenses, so a few years ago I was able to calculate my real lifetime costs at $.15/mile, asymptotically approaching $.10. Of course when I travel for work the IRS says I charge $.50/mile, which is pure profit.

The IRS numbers assume a newish car (more expensive) that gets poor fuel mileage. It is probably correct for the average car, but there is no reason you need to be average - unless you want to.

In my country (EU, so gas is a bit more expensive) the government calculates* transport costs at 0.37eur/km. So $0.45/mi would be in the right ballpark.

You have to account everything, not just fuel, from car depreciation, servicing (oil changes,...), normal wear (brakes, tires,...), occasional replacements (batteries, wipers, ...), etc. If you drive 20.000kms per year, and a yearly service (oil, filters,...) costs 200eur, just that adds aditional 0.01eur/km. Two sets of tires (winter/summer) are ~2300eur + 8 changes (8~40eur) adds an additional (almost) ~1k eur in four years, 1 more cent. Insurance, registration.. 3, 4 cents. etc.

*that's the untaxed amount you get reimbursed for if you use your own car for a business trip.

There are two different calculations here. One is, what's the total cost of vehicle ownership amortized per mile? That's what the government and most popular types of accounting use.

The other is, given I'm going to own a car already, what's the difference between a shorter commute and a longer one? That's going to be a lower number per mile. A big chunk of the vehicle's depreciation is a result of years rather than miles, insurance doesn't generally track how many miles you drive and charge extra if you drive more, the registration and tax isn't any different etc.

The second one is how a lot of people end up all the way out in the suburbs. They can't afford to live in the part of the city that makes it viable to not have a car at all, but once you have a car as a sunk cost, another ten or twenty (or thirty or ...) miles in exchange for saving hundreds of thousands of dollars on housing starts to look like a good deal.

Though the huge factor people commonly forget is their own time. If your time is worth $25/hour then a half hour each way on your commute is $6500/year. And that's assuming you're only further away from work and not also further away from whatever you do on weekends.

> A big chunk of the vehicle's depreciation is a result of years rather than miles

Ehhhh, I'd say that it's not that skewed towards age of the vechile beyond common correlations:

  - usually more years = more miles
  - cars < 5 years are usually in warranty and fetch a premium

> insurance doesn't generally track how many miles you drive and charge extra if you drive more

Mine does: in 5000km increments. (Australia)

> Ehhhh, I'd say that it's not that skewed towards age of the vechile beyond common correlations

But the warranty period is a huge amount of value, and there are others, e.g. newer cars are safer and have whatever other improvements so older cars aren't worth as much regardless of milage. Then many repairs are age related rather than mileage related, e.g. a car exposed to the elements will rust or experience day/night thermal stress even if you don't drive it.

> Mine does: in 5000km increments. (Australia)

Let me rephrase this. The insurance cost does not scale linearly with miles driven.

"Mine does: in 5000km increments. (Australia)"

Insurance has interesting edge cases, like 3rd party can be more expensive than comprehensive, as risky drivers go for the former.

I've had insurance before, where putting in a higher mileage lowers the premium. I assume there's a lower bound where you start getting into Sunday driver territory where risks start increasing?

My insurance company has asked me to confirm my miles per year on occasion, especially the commuting part.

Most of the charges you list are mostly fixed (with time) rather than variable (with distance driven). Yearly service and yearly tire swapping: doesn't change by miles. Batteries and wipers: mostly fixed. Depreciation: probably 80% fixed. Insurance: mostly fixed. Registration: totally fixed.

On a marginal basis ("what does it cost me to drive one extra mile?"), I think my cost is about 7-9 US cents on my electric and about 12-15 US cents on my wife's CR-V. On an overall basis ("what does it cost me in total for the cars divided by how many miles I drove?"), the figures are more like $1/mile for the electric (still have a car payment, full insurance, and only drive 4500 miles/year) and $0.30-$0.40/mile for the Honda (paid off, so just carrying insurance, registration, taxes, and some timed maintenance items)

If we moved farther away, our fixed costs stay about the same, and it's only the variable costs that go up.

I did account for everything above. I keep track of everything.

Note that I do my own maintenance on Saturdays, so I don't put a monetary value on my time. However before you say I should account for my time, do you account for your time taking the car to the shop - I started doing that a few years ago and stopped because I realized that for most things I could get it done faster myself than take it in. (taking it in accounting for all time getting the car to the shop, arranging rides (sometimes a loaner car, sometimes my wife's time), and paperwork. When doing the work myself I can stop at the auto parts store next to the grocery store and so much less time needs to be accounted for there.

Yes, that number is very real. Especially if you start including non obvious costs like insurance, on top of ones like gas, maintainence, license and and registration, etc. I’m near $.90/in my current car. (That number is skewed high because It’s paid off early and I now have a 2 mile commute to work, so there was a lot of money upfront and I don’t pack on the miles anymore) but I would wager $.50 is right near the mean. But buying cheap used and running it 200k miles will bring your costs down for sure, but $.10? At 30mpg and $3.00/gallon you’re looking at $.10 cents a mile already!

How is including the fixed costs at all fair? Even if someone lived clothes enough to use public transport some some activities; work during rush hour. People in the US often still need a car to get to everything else in a timely manner such as doctor appointments. Groceries are a big one as well, how are you going to carry 2 weeks of food for 2-4 people on a bus or rail? A lot of public transport users still need to drive to the station.

My estimation is that a large portion of public transport users only use it for part of their transport needs thus making the fixed costs of car ownership a sunk cost.

Therefore, the variables costs; gas (or electricity) and maintenance make the most sense to use in living cost estimations. Even at the extreme end where you can live in the middle of a city and use public transport for mostly everything, you'd still need a car or a friend with one to go skiing.

Owning a car has costs, some if them are fixed, including them are entirely fair.

We could have a debate about including it in a per mile rate, rather than splitting it out, but ultimately they are costs car owners have to pay, and non car owners don't.

A sunk cost is still a cost. A cost you have to pay is still a cost.

We can’t say that car ownership is a consequence of location if you are going to own the car regardless of location. Plenty of city-dwelling transit commuters drive on the weekends; it’s not fair to say that transit access == zero vehicles.

I think we could say it switches from a necessity to a leisure expense, and that city dwelling households can get most of what they want from a single car vs. several.

I'm not sure that we can't say car ownership is a consequence of location. Plenty doesn't mean all, and transit access == zero vehicles is an argument no ones making.

Clearly if a household moves from several cars to one car, fixed costs will decrease, which seems like an argument to measure fixed costs.

I'd agree with your point about vehicles potentially being leisure expenses, you could perhaps go further and start dividing up those fixed costs between leisure use, and business use. I'd even accept the argument that if you need a car, your leisure transport should be free from the fixed costs, as they have to be borne anyway, but they do have to be accounted for somewhere.

The fixed costs still depreciate. You still have to either pay upfront for the car, finance it and pay interest, or lease it, and the car has a fixed lifetime. Repair/maintenance should go in there as well.

I'd be curious how many miles the grandparent has on the car though. My per-mile costs are also sky-high (because it's 10 years old and only has about 40k miles on it - I think it works out to $0.75/mile or so), but the flip side is that if this drives like a normal Honda it should be good for another 150k miles and, if I don't get into an accident or change my driving habits, I will never need to purchase another car.

Current just over 260,000 miles. This makes a big difference in my per-mileage calculations, as you said, someone who drives less than I did (I had a few contract jobs far from home) would see different numbers.

Nit. Your driving costs shouldn't be affected if you pay off your loan early, the cost of the car should be averaged over the expected life of the car. If it were it should be downwards as you aren't paying interest.

I track every tank so I know exactly how much I've spent on fuel. Of course I'm also getting 46mpg not 30 which makes a big difference.

If you buy a $30k car, and manage to get 120k miles out of it before you scrap it, you are paying $.25 a mile just in capital depreciation expense. That's before fuel, insurance, property taxes, maintenance and repairs.

What about a $10,000 used car you buy with 50,000 miles and run until a good 150,000? That's just 10 cents per mile. Depending on the make, the repairs may not be much, either.

I've bought $500 cars before. Didn't last too long (it was a nice car, but it was an interference engine and broke the timing chain), but averaged 10 cents per mile.

People who spend 45 cents per mile are the type who lease their cars or buy new cars regularly. Lots of us out here make do happily with far less.

Mister Money Mustache estimates "very cheap" driving costs to be around 17 cents per mile:

https://www.mrmoneymustache.com/2011/10/06/the-true-cost-of-...

Now, I will admit that it is possible to bring your cost per mile down somewhat. That’s one of my own specialties, which is why I still keep a car of my own around for affordable family roadtrips. If you buy the right car for $5,000, you might be able to squeeze 100,000 miles out of it with no major repairs. In this case the car depreciation is 5 cents per mile.

Gas, at $3.50 per 35 miles (assuming 35MPG), is 10 cents/mile Tires, at $300 per 50,000 miles are 0.6 cents Oil, at $25 per 5,000 miles is 0.5 cents Miscellaneous things like wipers and occasional maintenance visits: $200 per 20,000 miles = 1 cent

So the ultimate cheap driving in a paid-off economy car still costs at least 17 cents per mile.

It's possible to do even better... I bought a used electric car (Volt) for about $9600. It had about 65k miles. It does about 85% of its miles electric (meaning oil changes and brakes are super rare), so over the next 100,000 miles, we're talking about 14 cents per mile total, roughly.

Many of the assumptions are different for different cars. For my car it is $3 per 46 miles, or $0.065/mile. Note that 46MPG is actual, EPA would give me 41.

A car at 120k miles is nowhere near being "scrapped". What will actually happen in that case is someone else is going to buy it and put another 100k miles on it.

What can you get for it, $3-5k? That's still $.21 - $.22 per mile only in depreciation and before factoring the time value of money.

Why sell it? The average millionaire drives a 15 year old car they bought new. A well maintained car will last a lot longer than most people give them credit for. You get tired of the old thing, but it will runs.

Welcome to Michigan. Or anywhere else that uses road salt.

Newer vehicles are a lot better, but cars age quite a lot faster with salted roads.

I live in Iowa. No stranger to road salt.

As a family living in a rural area with a large commute (driving) to a major UK city I still see it as a net benefit even if you factor in large cost for vehicle maintenance etc.

I get to live away from the hustle and bustle of the concrete jungle for one.

out of curiosity, did you account for her time in the car as any sort of expense? I assume it's downtime she can't use to do something else. (though some people enjoy driving, listening to music or podcasts, etc, so for them maybe it doesn't matter.)

Reply on news.ycombinator.com