Cost/mile

[supton]

The discussion comes up every so often, and I try to figure out what my cost/mile will be, prior to buying a vehicle, so I'm not caught unawares. I realize a 1 ton being used for landscaping is going to cost different than an econobox; buying used vs new may or may not have an impact depending upon how long one owns a vehicle for. That said…

The question I have is, what is a good cost/mile for commuter cars; and/or perhaps the next size up? Last vehicle or two I was content at trying to beat 25cents/mile, not including registration/insurance (I figure those as static, per year costs instead); but between rising gas costs, rising car costs and a tendancy to buy new I'm not sure that is a good value anymore. [About fifteen years ago I tried to hit 10cents/mile--and I think I did--but I couldn’t hit that again.] I have a couple more years before I have to replace my VW, but I’d like to be prepared for the sticker shock.

On my current VW, costs were predicted (and are somewhat close in reality) at:
-10c/m depreciation
-6c/m fuel
-5c/m repair
-4c/m maintance
[Fuel costs have soared since then! But repairs were much lower than predicted.]

I’m thinking a stab in the dark is:
-15c/m depreciation (if new, not sure what used would run)
-15c/m fuel (unless if one goes diesel or hybrid)
-5c/m repair (it is good to prepare for the worst) (this, or maybe a raw $1k/year?)
-5c/m maintance

40cents/mile for something new seems awefully high. I’m guessing used could take a good 10c/m off from that?

 

[supton]

Side note, nitty gritty for my situation, which influences my purchasing decisions and not anyone else:

I’m assuming a short ownership time would be 5 years, long would be 10. So one time big repairs should average out; if anything, I’m expecting at least one major large repair (large being anything over $1k on one bill) on any given vehicle. Also, and this might not factor into others opinions, I no longer work on my car(s). I don’t have too much need above getting to and from work; but I do need four doors, and really, at least 1,500lb towing (utility trailer for moving things so as to avoid a costly pickup truck, and/or small camper). I drive about 25kmiles/year, I live in salty NH, and would be willing to consider using two vehicles, so that if one is in the shop I could still get around. I need vehicle(s) that I can hop in and drive 1,000 miles without worrying; I need to move my two kids around in safety; the idea of a “nice” drive is also nice too. I do not relish taking days off from work to fix a vehicle.

 

[mechtech2]

Repairs and maintenance should be very similar for any new cars.

So we are really comparing fuel use and depreciation.

 

[Astro14]

40c/mile seems awfully LOW to me...when all the costs are included...shoot, even the IRS will allow you to deduct 50c/mile for expenses...

Did you include insurance?

 

[supton]

No, I didn't include insurance/registration. I figure, as long as I drive more than 1,000miles/year, I will own a vehicle. Thus, those are "fixed" costs. Sure, I could divide those down, but since I won't own a sports car nor a pickup, the costs are rather fixed, and therefore not something that can be adjusted through stupid or wise decision making. [Well, it could be adjusted by stupid driving, I guess.]

I think I pay maybe 5.6c/m for the both, not real sure. Could be close to 4c/m now that I think about it (full collision, 8 year old vehicle with high safety ratings, no points/accidents/etc, married and over 25, discout for house,life,etc; divide by 25kmiles/year).

 

[supton]

Originally Posted By: mechtech2
Repairs and maintenance should be very similar for any new cars.

So we are really comparing fuel use and depreciation.


I would hope so, but one never knows. I know our Civic managed to go 50k further before wheel bearings, and it would have never blown its turbo. OTOH my VW has more than 100k more on its exhaust system, so... Who knows. All i know is, under short term ownership I'm going to hit 125kmiles; and under long time I will hit 250kmiles. Repair prices come out of the mud real quick over 150k in my experience.

 

[97f150]

Idk that I ever even thought about calculating cost per mile on my vehicles. I doubt I'd care either way as driving something I like and enjoy driving takes precedence. I just can't see myself loathing every drive I have to take because I'm saving 4 cents a mile. That said, my company pays for my truck, fuel, and maintenance so that's the biggest reason I don't worry too much about it.

 

[supton]

Originally Posted By: 97f150
That said, my company pays for my truck, fuel, and maintenance so that's the biggest reason I don't worry too much about it.


Between my wife and I we drive about 50kmiles/year. 22k is for my commute to work and back; my wife must be doing something similar for busing the kids around. Ergo, just like everything else I pay for, it is something I keep tabs on. Or try to, anyhow.

While in college I had to make the hard decision a couple of times to park my vehicle; just could not afford to drive. I can't see myself doing that again--but one cannot argue with the numbers. If 50c/m was reasonable--I'd simply have to figure out how to drive less, as that would be a ridiculous percentage of my income.

 

[Spector]

Also depends a huge amount on length of ownership. Depreciation on a 3 year vehicle if dumped at that point is huge, like 40% of the cost whereas dumping it at 10 years the depreciation is much less of a cost factor and the repair expenses increase. New cars though, I expect (except of electronics) to last linger and need fewer repairs but the electronics are scary and a fortune to repair.

To me the real cost of ownership will be the depreciation and the repairs, all others will differ slightly from vehicle to vehicle not immaterial in the long run to depreciation and repairs.

 

[supton]

Yep, no doubt lenght of ownership plays a part. Which is why I figure 5 years for short term ownership, or 10 years long term. That should mean at least one large repair, if bought new, on a 5 year vehicle ownership; 2-3 large repairs if bought used and owned for 5; and 2-3 large repairs if bought new and held for 10 years. Pure SWAG, of course.

That said--am the only one who tries to predict cost/mile ahead of time? I know I drive above the average milage/year, so fuel cost is quite important.

 

[javacontour]

Check out Edmunds.com. I think they have a Total Cost of Ownership calculator that may help you compare vehicles using the same math model.

At least it would give an idea, a ball-park of where different cars lie on the scale.

I believe the IRS allows 0.555/mile right now. That's the rate I'm reimbursed mileage at work. My costs for the '03 Protege5 so far are in the $0.25/mile range. My beater '94 Geo Prizm was around $0.13/mile give or take. But I bought that for $2500 and sold it for about 1/2 that after 7 years and about 150K miles.

The lowest TCO is to buy with cash an 8-10 year old car at around 100K miles and drive it another 100K.

 

[doitmyself]

Yes, there are many articles out there about total cost of ownership, such as this Consumer Reports one: http://www.consumerreports.org/cro/2012/06/what-that-car-really-costs-to-own/index.htm

:

Seems that if you are trying to use this as a budgeting tool, you cannot ignore your "fixed costs" (insurance, financing,etc.) because they are significant factors also.

The possible variables are huge. One catastrophic repair (I.E. air conditioning) can throw all your cost per mile calculations out the window. Placing "wants" over "needs" could also make the exercise moot.

Interesting, none the less.

 

[supton]

I'm sure they are significant factors, insurance and registration--but aren't those are fixed? Unless if I buy a Porsche, I presume. I can't control those costs, so I'm ignoring those--only way to make those smaller is to reduce my fleet. At least ignoring factor for now.

Also, I don't see how a catastrophic repair throws everything out the window. If I am allotting 5c/m for repairs, over the course of 100kmiles I've "saved up" some $5k. It would be quite catastrophic to cost more than $5k! Also, I'm not sure what items are wear vs repair. I mean, what struts are really lifetime? Wheelbearings? Could argue that catagory around for a while I suspect. I'd think 5c/m for one and 5c/m for the other would cover quite a bit.

One issue with that CR report: doesn't state miles/year. At 25k/year I'm sure my numbers are different. Depreciation is much higher, fuel cost is much higher. Interest and insurance is unchanged; repairs and maintance is increased. OTOH it is tempered by driving a vehicle past what most would...

Am curious how others fare on this. It seems the cheapest route is to buy old vehicles; but that means I have to increase my yearly insurance/registration cost by 2x, as, older vehicles get repairs more often; and I don't fix cars anymore, so I would have to own two vehicles for the sort of reliability I require. So if the claim can be verified that I could beat say 20c/m with used, vs 40c/m new, do I get sunk on having to own two vehicles?

[I suppose I do need to go look at that insurance factor now, appears I was wrong to ignore...]

 

[supton]

Ok, tracked down my insurance and registration costs. Full collision is around $800 on an 8 year old car; I’m guessing if I drop collision it’d be $300 maybe?—and a new vehicle would be $1k for full collision. Registration is around $400/year, depends upon value.

On my current VW, costs are around:
-10c/m depreciation ($25k purchase, unknown residual, 264k currently)
-10c/m fuel
-3c/m repair (about $6,400 over 264k)
-5c/m maintance
-800/year insurance
-400/year registration
=$8,200/year

I’m thinking a stab in the dark for new vehicle:
-15c/m depreciation ($28,000 over 187k?)
-15c/m fuel
-3c/m repair (so far, so good)
-5c/m maintance
-$1k insurance
-$500 registration (a guess for now)
=$11,000/year

And a stab per used vehicle, liability only:
-4c/m depreciation ($4k purchase, 100kmiles/4year predicted life)
-2c/m initial repairs (it’s a $4k vehicle! Whatever the PO didn’t do)
-15c/m fuel (like I’m going to buy a used hybrid or diesel, and fuel prices are only going to keep rising)
-4c/m repair (it’s a well used vehicle)
-4c/m maintance (arguable)
-$300 insurance
-$300 registration
=$7,850/year

But! I’d need two of these well used vehicles, as one of my “requirements” is that I don’t take days off from work when my car needs to go into the shop for a new clutch/transmission/alignment/timing belt/whatever. That would increase to about $8,450/year. A good savings over new, though.

My VW was either well planned for, or one heck of an oddity.

 

[surfstar]

Used, cheap and reliable. If you can find one that meets all of those, it won't be beat in cost. I agree that not working on your own cars anymore will hamper that route. Perhaps new, cheap and longest warranty is a better bet for you? I'd rather own one new vehicle vs two used unless they were vastly different (sports car / commuter / truck / SUV).

With the miles you drive yearly, reliable and high mpg should be the winner.

 

[IndyIan]

One option if your work situation is stable, is to move where one of you don't need a car for commuting. I have a few friends that have done this and the savings going from 2 cars to 1, like you've shown, can be very significant.
Keeping your camry for 20 years is probably going to be very cost effective as well.

 

[supton]

Would a Camry make it 20 years? Wife is driving at the predicated rate of 25k/year also. Also, I'd think it'd rust out long before then. I'm thinking 10 is a good goal for that car.

Would like to move, but we love our town. Great schools, zero crime, lots of hiking and biking, etc. Plus I'd pay out about $100k I'm guessing--maybe as low as 50k, maybe 100k--need to move from 2 bedroom to 3 bedroom, house prices go up as I get closer to work, and I lost 40k on my house so far (25% depreciation). Huge variables there. I'm guessing we'll move in 5-10 years though, as fuel prices will dictate that, and I'm guessing my wife will need to commute further than me for her job. So--eventually we'll move, but not a possibility for a while.

 

[javacontour]

You get some breaks by owning more cars than you can drive. Beaters are liability insurance only.

Registration is typically fixed, but insurance depends on the car. Sometimes older is MORE because there is a higher probability of totally the car from a comprehensive or collision claim. Liability only isn't impacted as much by the age of the car, just the claims history for that vehicle.

You can always rent a car if you have a beater. Even a day off is usually less than one monthly car payment.

Any reason not to keep the VW and just buy a 3rd car? Or trade the newer Camry for two 5 to 6 year old cars? Or just get into a rotation. You have the 04 VW with high miles, find something that is an 06-08 with fewer miles and start racking up the miles on that, while keeping the Jetta as a beater or for when you could use a wagon? Eventually, you rotate the cars down the line. The Jetta goes away in 4-5 years, the Camry is passed down to you and your older car becomes the spare for both you and your wife, and she gets the newer car.

So you would have three cars in the rotation. One is 10+ years old with over 250K miles. One is 5-10 years old with 125K+ miles and the third is 5 years or younger with under 125K miles, give or take.

 

[IndyIan]

Originally Posted By: supton
Would a Camry make it 20 years? Wife is driving at the predicated rate of 25k/year also. Also, I'd think it'd rust out long before then. I'm thinking 10 is a good goal for that car.

Would like to move, but we love our town. Great schools, zero crime, lots of hiking and biking, etc. Plus I'd pay out about $100k I'm guessing--maybe as low as 50k, maybe 100k--need to move from 2 bedroom to 3 bedroom, house prices go up as I get closer to work, and I lost 40k on my house so far (25% depreciation). Huge variables there. I'm guessing we'll move in 5-10 years though, as fuel prices will dictate that, and I'm guessing my wife will need to commute further than me for her job. So--eventually we'll move, but not a possibility for a while.

I bet you could get more than 10 years out of the Camry body, I always thought the Tracker would be a 10 year car as well but it only has superficial rust so far and no major repairs.
I don't know if you need all the space of the VW but probably a lower running cost replacement would be an 2001-2005 Echo. No timing belts or VW electrical issues or diesel related shenanigans, and about the same mileage. Also we had a 4 door hatch version up here.

 

[supton]

Problem with a car rental is getting to it--30 mile drive. Not huge distance, but not something I can just pick up from the way back from the mechanic (he's in the wrong direction no less). Negotiating rides with the wife to pick me up is possible, but with kids starting after-school stuff that is getting dodgey.

I do have to look into this oiling the car business. We got rid of our Civic after 10 years for multiple reasons; one was rust fears. I was worried about it blowing a brake line. 10 years of NH rust and all. Perhaps I'll have the Camry oil coated this year. [The VW has rust issues, but oiling would not have prevented all the locations.]

Another reason the Civic went away was size. It really was a small car, and my VW is the same size. Yes the kids fit in the back. But it's really about the lower limit. And if the Jetta is in the shop, then I still need four doors for when I pick the kids up after work--so no two door beaters for me.

I am migrating towards some beater spare 3rd vehicle, not sure what, but it does seem to make some sense. I think I got the most problematic issues dealt with on my car, so it should be reasonably good to go-for now. Really no good reason to get rid of it, unless if I rule out owning a spare vehicle. Which is the issue: do I give in and own three vehicles, with the attendant increased insurance/registration/rotating three vehicles to the garage; or do I limit myself to two? Two vehicles means very high reliability, and thus more depreciation costs, while three means lower reliability allowed, but more shop time.

I think we're keeping the Camry for at least 5 years (too much money lost on depreciation) if not 10; plus, we've taken to the vehicle for our long trips. As much as I love my Jetta, the Camry is more quiet, and simply has more space.