What Is the True Cost of Car Ownership?

After CNET's Roadshow published an article titled "Average New Car Price Crosses $40,000 in 2020 and That's Nuts," Matthew Lewis of California YIMBY tweeted:

This is a lot of money. Used cars are expensive too, the average in 2020 being $27,689. But the cost of buying the car is just the start; there are so many other direct and indirect economic costs that one really has to question whether this whole system makes sense. And that's not even considering the carbon costs. Let's total them up; from CNET:

"On average, new car buyers left dealerships (or signed papers from home) having agreed to a car payment of $581 per month at a 4.6% APR over 70 months." But that's $6972 per year.

Cost of Gas

The average American drives 13,476 miles per year. Gas prices go up and down, but taking the average over the last few years and the average fuel efficiency of light trucks and cars in 2016 at 24.7 miles per gallon, they come up with a really rough average of $1,092 per year.

Cost of Insurance

This will vary widely, but it averages out to about $1,300 per year.

Cost of Maintenance

These can vary wildly depending on what you buy and how long you keep it, but The Balance estimates roughly $1,000 per year. Both gas and maintenance should drop significantly as cars go electric, but the price of the car will probably go up to where the overall cost of ownership is similar. And then there are other, external costs that are not usually included in the cost of car ownership, but should be.

Indirect Costs: Infrastructure

Many people believe that the gasoline tax covers the cost of roads, but it hasn't increased since 1993, and every taxpayer is making up the difference. In their 2015 study Who Pays for Roads? Tony Dutzik and Gideon Weissmen of the Frontier Group listed other costs that are paid through general taxes but that can be attributed to cars:

• Road construction and repair per US household: $597
• Tax subsidies, sales tax exemptions, federal income tax exclusions: Between $199 and $675
• "Government expenditures made necessary by vehicle crashes, not counting additional, uncompensated damages to victims and property": $216
• Costs related to air pollution-induced health damage: $93 to $360

That's between $1105 and $1848 per year. Since the data are 5 years old, let's take the high end.

That is paid for by everyone, every cyclist and transit user as well, and it is many times the taxes paid per person to support transit, biking, pedestrian infrastructure, and passenger rail put together.

Cost of Free Parking

In his book "The High Cost of Free Parking," Donald Shoup noted that everybody pays for parking whether you drive or not. He tells Vox that "parking doesn't just come out of thin air. So this means people who don't own cars pay for other peoples' parking. Every time you walk somewhere, or ride a bike, or take a bus, you're getting shafted." He estimates that the annual subsidy for parking built into the costs of goods and real estate is $127 billion per year, which can be more than the cost of driving. Divided among the 273 million cars in the USA (I know, they are paid for by everyone, but for this exercise let's pretend that they are paid by drivers, which they should be) that's $473 per year.

Cost of Policing

In her book "Policing the Open Road," Sarah H. Deo explains that before the automobile there were a lot fewer police, doing very different work.

"Before cars, U.S. police had more in common with their eighteenth-century forebears than with their twentieth-century successors. What revolutionized policing was a technological innovation that would come to define the new century. In the span of a century, towns and cities throughout the country—and not just in metropolitan centers—expanded their forces and professionalized beat cops, turning them into “law enforcement officers.” Figures are hard to come by, but one early report indicated that in the sixteen smallest states, the number of officers as a percentage of the population nearly doubled from 1910 to 1930."

Americans spend $115 billion a year on police. How much of that is attributable to cars? I had trouble finding data for the USA, but a Canadian study I found showed that traffic enforcement and vehicle stops totaled about 30%, or $34.5 Billion, or $127 per year.

Cost of Sprawl

In one of the urban design tweets of the decade, Jarrett Walker nails it: Cars and sprawl are the same thing, you can't have one without the other. Most of North America is suburban these days, and the way things are set up now, most people in the suburbs have to drive; it was the whole point.

But there are real costs to that sprawl. Todd Litman did a study of it for the New Climate Economy and wrote:

"An abundance of credible research indicates that sprawl significantly increases per capita land development, and by dispersing activities, increases vehicle travel. These physical changes impose various economic costs including reduced agricultural and ecological productivity, increased public infrastructure and service costs, plus increased transport costs including consumer costs, traffic congestion, accidents, pollution emissions, reduced accessibility for non-drivers, and reduced public fitness and health. Sprawl provides various benefits, but these are mostly direct benefits to sprawled community residents, while many costs are external, imposed on non-residents. This analysis indicates that sprawl imposes more than $400 billion dollars in external costs and $625 billion in internal costs annually in the U.S."

Again, thanks to a few years of inflation since 2015, let's take the high end; that's $2,289 per year.

When you total it all up, you get a ridiculous number in direct annual costs, $10,364, that a big portion of the population cannot afford to pay, yet they have to because they have no choice if they want to work. Then you have $4,737 in indirect annual costs that everybody is paying, but if were paid for by the drivers, would increase their costs by 50%. It is simply not sustainable, financially or environmentally, especially now when everyone is buying Ford F-150s. Imagine if all that $850 billion in indirect costs could actually be applied to other forms of transportation; that could buy a lot of transit and bike lanes. For that matter, it could pay for a lot of decent housing for people on top of transit hubs or near where they work.

It's so important to think about this now, at the dawn of the age of the electric vehicle, when we have less than a decade to cut our carbon emissions in half. Should we not now be looking at the incredible cost of car culture and trying to change it? Julie Tighe recently wrote in Streetsblog:

"Climate change is the existential crisis that will continue to be in the windshield when the pandemic and economic crisis are in the rearview mirror. But we can’t reach climate goals simply by reducing car emissions; we need to actively encourage the use of other means of transportation. We have a long road ahead of us to reach our climate goals and break our streak of continually warming the earth. New York has made progress, but now it’s time to rethink how we travel."

Why We Need Electric Cars, But We Also Need Fewer Cars

This is why a few years ago I wrote that we don't need electric cars, we need to get rid of cars. I would always get attacked by people who say that we need cars, not everyone can ride a bike – so now I say fine, but we still need to reduce the number of cars that we have on the road. Instead of investing billions in subsidies for electric cars, we have to do so much more to make it possible for people to live without cars. As I noted earlier in "Electric Cars Are Sucking Up All The Air in The Room":

"Spending billions to promote electric cars while continuing to spend many times more billions pouring concrete to expand highways will not get us to where we have to go in ten years, let alone by 2050. Spending millions right now on paint and bollards to make bike lanes and dedicated bus lanes so that people do not have to drive could make a difference right now.

And the EV [electric vehicale] drivers will be out there with the ICE [internal combustion engine] car drivers with their lawyers and their picket signs, fighting against every bike and bus lane and defending every parking space, because that's what people who drive cars do."

Others have said it better, about how big money is big on electric vehicles. As I quoted Eric Reguly writing in the Globe and Mail:

"Cars take up public space. They need to be parked. They are a menace to pedestrians and bikers. They require roads and taxpayer funds to build and maintain those roads. The ideal city is not filled with sleek, silent, non-polluting e-cars; it is a city devoid of cars. Yet the tech lobby, the Wall Street machine behind it, and Elon Musk, boss of Tesla, the world’s most successful EV company, would have you think that buying an e-car is the morally correct and patriotic consumer choice."

Heather Maclean wrote for the University of Toronto:

"EVs really do reduce emissions, but they don't get us out of having to do the things we already know we need to do. We need to rethink our behaviours, the design of our cities, and even aspects of our culture. Everybody has to take responsibility for this."

As we dig our way out of a health, a political, and an economic crisis, and slide deeper into a climate crisis, it would seem to be a propitious time to think about this.