The Lifetime Cost of a Small Car: $689,000; Society Subsidizes With $275,000

Although cars can be very convenient, they can also be extremely costly for owners and society as a whole. A new academic study has shown that the average lifetime cost of a small car, such as an Opel Corsa, is $689,000. Society pays $275,000. (A Mercedes GLC is $1+m in lifetime costs.

Although the research was primarily focused on Germany, Stefan Gossling, the lead author, said that the same principles apply to other countries.


He said that motorists underestimate the private cost of car ownership while policymakers and planners underestimate the social costs.


Cars are costly due to their high price tag and depreciation, as well as the additional costs of insurance, repairs and fuel purchase. Mass motoring’s social costs–known to transport wonks as negative externalities–include carbon emissions from burning petrol and diesel, congestion, noise, deaths and injuries from crashes, road damage, and costs to health systems from sloth.


Building codes often require other subsidies such as free parking on the streets. America’s 250 million vehicles are overloaded with 2 billion parking spaces (think Wal-Mart at Christmas), yet they spend 95% of their time driving.

Gossling used 15,000 km per year to calculate his cost calculation over 50 years. Similar conclusions have been reached in previous studies that used different parameters.

And Mr. Money Mustache, real name Pete Adeney, blogs to 350,000 regular readers. He advises them how to retire young and still live comfortably. “Mr. Money Mustache”, real name Pete Adeney, blogs to 350,000 readers and advises them on how to retire young. He stated that an average American couple would pay $125,000 for each of their ten-year-old children if they drove to work in their own cars, and spent $19 per day driving.


The couple could live closer to work while bicycling there, which would net them a cool $250,000.


Cars suck

Cars drain more money than most people realize. In his 1974 book Energy and Equity, Ivan Illich calculated that half of an average week’s income goes to paying for running an automobile.

Illich wrote that the average American male spends more than 1,600 hours per year in his car.


“He spends 4 of his 16 waking hours on roads or gathering resources for it.”


Illich stated that the average speed for a car traveling 7,500 miles is less than five miles an hour when you factor in the labor needed to purchase and fuel it.

Wealth

Counting the total and actual cost of a more-expensive-than-understood form of transport is a calculation that can hurt. Henry David Thoreau, an American essayist, first raised the bruise in 1850s. He urged citizens to consider the true costs of railroads and the labor involved in their construction.

He explained that “we don’t ride on the railroad, it rides upon us,” in Walden, his easy-living book.

Adam Ozimek (chief economist at Upwork), tweeted recently that mass-market ownership of cars doesn’t make economic sense.


He wrote that $40,000 for a car seemed like something that he would do if he had $400,000 per year in wealth.


“But absolutely normal people do this all the time!” It blows me away .”


Gossling, a German academic who works at Linnaeus University’s business school in Sweden, is also stunned by the acceptance of expensive car ownership being normal for even low-income earners.


Although much of the built environment encourages car use, it is not surprising that many people choose to drive short distances when walking would be cheaper and more healthy.


Gossling said that getting people out of cars is not something most politicians are interested in discussing.


“It is a transport taboo. You can’t touch that politically, because you’ll burnt.”

Road pricing is a good example. Road pricing is a good example. Last night, the U.K. parliament’s transport committee tweeted that “it’s now for an honest discussion on motoring taxes”. In a rich new report, it suggested that the time was right for pay-per mile motoring.

Shock-jocks utter “war on motoring”. It’s an emotive subject. A petition was signed by 1.8 million motorists in the UK against road pricing in 2007, fearing that motoring costs would rise.

The report of the transport committee stressed that road pricing would not be used to reduce miles driven. MPs reassured that most motorists would pay the same or less as they currently do.

Who pays the difference? We all do. Motoring subsidies are paid for by society, which is unfair to those who don’t own a vehicle.

Gossling points out that “one in five German households doesn’t own a car”, but all of them are subsidizing car travel.

Gossling stated that none of the above is relevant for someone who makes a lot of money.

“Where there is a difference, it is for people on low incomes. They can really suffer from paying huge amounts over a lifetime to car use.

He argued that cities and countries should be designed to allow people to be mobile without the need for a car.

He warned that car manufacturers are concerned about people having ideas about selling their cars.

“In our research we are not suggesting that you should take away cars from people. We’re simply saying that it’s more prudent to invest in infrastructures that are cheaper, such as active mobility, and where people will choose to switch.

Gossling said, “Cycling in Germany is growing rapidly.”

“It wasn’t something that was forced upon people. It’s what people want. People want to feel healthier. Numerous studies have shown that active travel is good for your mental health and physical well-being. Cycling is great for cities, it’s much more efficient than driving.

He said, “Change can be rapid.”

The key to accelerating this change is a better understanding about the total cost of motoring, particularly for those who cannot afford it.

Gossling’s study concludes that policies favoring automobile travel over other more cost-effective and resource-efficient options are detrimental to most households, including those with lower incomes.

“Such policies force many families to have more vehicles than they can afford and imposes high external costs on those who depend on walking, biking, and public transit, especially for the elderly.”

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