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CARS/OWNING
& OPERATING COSTS
source: www.dft.gov.uk
www.stonyrunfriends.org/Committees/
UnityNature/Cars.html
www.greenspiration.org/Article/
HavingCarEatingItToo.html
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"Drive to Work, Work to Drive" is a popular refrain in the United States, the country mostly dominated by car culture… - thirty years ago, Ivan Illich pointed out that a typical American male spent almost 20% of his time devoted to his car through travelling, sitting in traffic jams, finding parkings and earning enough to run it and pay it off; (1)
- according to the US Bureau of Labor Statistics (2001), annual car costs made up 19% of household expenditures, second only to shelter costs. In fact, the cost of car ownership for most US families exceeds the amount spent on food and health care combined. Furthermore, the American Automobile Association (AAA) calculated in 2004 that the annual cost of owning a car, after accounting for depreciation of the car's value, is more than US$8,000 a year, or 56.2 cents per mile;
- based on annual car costs calculated by the AAA a year before (US$7,754), in November 2003 the US newsletter Bicycle Universe published a conversion of car costs into time: the average American - it argued - earns about US$17/h, or US$14/h after federal taxes. So US$7,754 in annual car costs takes 554 hours to earn. That's over 3 full months of work each year; (2)
- according to the AAA, in 2003 these costs have had more than doubled since 1980. But, as MSN Money pointed out, gas and oil costs didn’t rise at all, in real or adjusted terms. In 1981, the average cost of a gallon of unleaded regular gasoline in the United States was US$1.38, according to the American Petroleum Institute. In 2003’s dollars, that US$1.38 equals US$2.53, but what did consumers actually pay in that year? The national average for unleaded regular was around US$1.50, so gasoline was a relative bargain, with prices comparable to 1970. Bottled water costs more! (3)
- in fact the United States, which uses about 1/4 of the world's daily oil consumption, has the cheapest gasoline prices of the 27 industrial countries measured by the International Energy Agency in its most recent analysis of fuel prices. Taxes account on average for just 20% of the price of gasoline in the USA, the agency said; (4)
- all these calculations, however, take into account only individual costs, which include: car ownership and depreciation, repair, insurance, parking, and travel time. But we should also include government costs (road expenditures, highway patrol, traffic court, emergency services, and other costs that are not fully covered by the gasoline taxes we pay at the pump), and social costs (air, noise and water pollution, climate change, dependence on foreign oil supplies, car crashes, productivity losses due to congestion, and other costs that are borne by society as a whole);
- in 1995 the Canadian Automobile Association estimated the annual cost to own and operate a sub-compact car at US$7,700 annually. And numerous studies suggest that there are significant hidden costs that society at large pays that in effect subsidise car ownership. If the owner paid the full costs of health care, air pollution, highway and road building and maintenance, etc., they would be paying as much as US$5,000 more per year. (5)
- a 1990 German study reckoned drivers annually spent an average of 470 hours of their pay for their cars. Meanwhile, the average German commuting cyclist spent 15 hours - about 3% of the car owners’ budget. (6)
Fixed costs must be paid whether your car is driven a lot, a little, or not at all. Variable costs depend on how much you actually drive. But do drivers know how much they are paying? The UK case…- according to the 2003 Royal Automobile Club (RAC) report, the typical British motorist believes he or she is paying just over £2,000 (about US$3,540) a year to run a car. The real figure is more than £5,000 (about US$8,870). What owner-drivers often fail to take into account is depreciation: if you buy a new car, you then effectively pay each year for the amount it loses in value. For this reason a new car can cost £2,000 annually, even if it spends that time sitting in a garage, untaxed and uninsured; (7)
- in the United Kingdom, drivers pay nearly 3 times what Americans do for gasoline at the pump (today, about 75% of the price at the pump is tax). However, Britons pay less tax to drive than many of their neighbours in Europe, an independent survey for the Scotland Office found. The hardest-hit is Denmark, where a driver of a 1,600cc car pays £2,966 (about €4,270 or US$5,270). The West European average annual tax for a 1,600cc vehicle is £1,222 (about €1,760 or US$2,170), compared with £1,205 in Britain. Colin Buchanan and Partners, the consultancy, found that it costs £1,753 a year in Finland, £1,509 in The Netherlands, £1,400 in Norway, £1,380 in the Irish Republic, £1,272 in Portugal and £1,227 in France to drive a 1,600cc car; (8)
- in March 1999, extensive tax reform was carried out with regard to environmental conservation. For passenger cars and mini trucks, the tax was 150 pounds (about €216 or US$267) across the board, and then was raised to 155 pounds in March 1999. In June, it was reduced to 100 pounds for vehicles with engine capacity of 1100cc or less. Since autumn 2000, tax rates are based on levels of CO2 emissions;
- according to the 2005 DfT Transport Trends Report, in the UK, over the past 20 years the overall cost of motoring has in real terms remained at or below the 1980 level while, in 2003, bus & coach fares have risen by 34% and rail fares by 36%. (9)
(1) Ivan Illich, “Energy and equity”, The Trinity Press, Worcester and London, 1974.
[ www.worldcarfree.net/resources/freesources/EnergyandEquity.rtf]
(2) [ bicycleuniverse.info/newsletters/2003-11-21.html]
(3) [ www.electrifyingtimes.com/motavalli_4_fresh_wheels.html]
(4) International Energy Outlook 2004. [ www.eia.doe.gov/oiaf/ieo/oil.html]
(5) Gomberg, T. and Bischoff, A., “Having Your Car and Eating it Too”, Natural Life Magazine, Nov/Dec 1996.
[ www.life.ca/nl/52/carshare.html]
(6) Seifried, 1990.
(7) “The slow and the furious”, The Guardian, December 20, 2004.
[ www.guardian.co.uk/transport/Story/0,2763,1377280,00.html]
(8) UK Government, Department for Transport (DfT), 09 June 2005.
[ www.dft.gov.uk/stellent/groups/dft_transstats/documents/page/
dft_transstats_026290.hcsp]
(9) [ www.foe.co.uk/cymru/english/press_releases/2001/motoring_
costs_parity.html]
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