Re: Cost per mile driven

[tomh@metrics.com (Tom Haapanen)]

John Greenstreet wrote:
> [...]  Heck, in New Jersey, it's
> fairly average to have insurance alone account for 20 cents per mile.
> To get to 10 cents/mile depreciation-wise, you'd have to drive a
> $20,000 car 200,000 miles.  Add in the opportunity cost of the car's
> equity, tyres, maintenance, fuel, oil, washing, waxing, etc. and the
> cost per mile of even an average car is well over 40 cents per mile
> if driven the average of 15 K miles/year.

Here's my calculation for the 1990 Golf GTI 16V which I bought new, and
sold at a little over 4 years of age (and 75,000 km) a few months ago:

	Depreciation	12.0 c/km
	Insurance	 4.0 c/km
	Maintenance	 2.5 c/km
	Tires		 1.5 c/km
	Fuel and oil	 5.5 c/km

	Total		25.5 c/km

After conversion to miles and US$, that works out to 29.1 cents per mile.
And gasoline is more expensive here -- US$1.65 per gallon of premium.

> Analyses that come up with a cost per mile of much less than 40 cents
> are probably omitting something, or looking at too short of a time
> period; e.g., the car's tyres may need replacement but that cost is not
> added in, or similarly with other wear items.  Remember that all a car's
> wear items need to be depreciated as well as the car itself.

The GTI was reliable, and at ~US$16,000 (new) not the most expensive
car, but it wasn't a beater, either.  The tire costs are based on 40,000
km (25,000 miles) per set of Comp T/As or other comparable tires.  But
if you're looking at a $30K+ car (such as an Audi 100), 40 cents is much
closer.

Our company currently pays 30 cents per km in mileage, and considering that
I already have my car (and thus it's depreciating anyway, whether I drive
it for work or not), that works out to be a pretty good deal for me.

-- 
[ /tom haapanen -- tomh@metrics.com -- software metrics inc -- waterloo, ont ]
[ "you ain't goin' nowhere, son"    -- grand ole opry manager to elvis, 1954 ]