The Big Expense Hiding in the Driveway

Even when the price of gas is low, the cost of owning a car, insuring it, maintaining it, and buying fuel makes up a big chunk of family budgets. The Department of Commerce estimates that for households making around $50,800, it is a bigger expense than taxes or health care at $7900 a year. But it's probably higher even than that. In preliminary results from our survey of 2000 households, families making $50,000 to $60,000 a year appeared to spend much more on their rides. By putting their averaged numbers into the government's calculations, they appear to be spending closer to $10.000 on cars and fuel this year. And even that is probably too low: People in our survey said their cars cost considerable more than the government estimates, which suggests that their car payments and financing costs are also higher.

We usually treat gasoline as a separate purchase from the car, but it's helpful to view the cost as a package. Outside of cities with convenient transit systems and pockets where walking and biking are feasible, owning, maintaining, and fueling a car is the price of the "ticket" we pay to work and move around the economy. While we think of cars as choices of paint colors, stereos, engines and identities, owning one--and usually two--is a necessity rather than a choice for most American households.

If you're hesitating to enter your own numbers in the tool above, you're not alone. Nearly everyone we talked with said he or she had not calculated total driving expenses. Some said they were afraid to know how much they spent because it would make them feel helpless or angry. What it comes down to is that people feel powerless over the cost of gasoline--which is certainly true--and they also feel that the amount of money they spend on gasoline is out of their control. Politically, these are potent feelings, but elected officials tend to talk about reducing the price of a gallon of gas rather than reducing the cost of the whole transport package (i.e. the car and the fuel it uses.)

Many of the costs of owning a car are adjustable. While insurance is a fixed price, maintenance depends on how old the car is. Financing depends partly on the cost of the car, partly on the buyer's cash in hand, and partly on the buyer's ability to negotiate price and credit. The cost of fuel is determined by the length of the commute, the fuel efficiency of the car, and the price of fuel. While it's impossible to reduce the price of gas, it is very possible to reduce some of the other costs of owning a car, or the quantity of fuel required, so that households can better afford to commute. Increasing transit options, or finding other ways to let families get rid of a second or third car could free up thousands of dollars that they could spend however they like. Helping them find an affordable efficient car to buy on credit would reduce their outlay, as would helping them afford housing closer to work. Down the road, designing a less thirsty infrastructure by changing development patterns and using technology to reduce the need to buy gas will get more families out of the energy trap.

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