# 2012 cost of operating a motor vehicle



## CHamilton (Apr 28, 2012)

2012 cost of operating a motor vehicle



> The just released 2012 Your Driving Costs survey, conducted by the American Automobile Association, estimated the cost of owning and operating a new midsize sedan at 59.6 cents per mile - equating to an average of $8,946 in yearly costs, based upon 15,000 miles of annual driving.


This comes up once in a while on AU, so I thought I'd link to the latest numbers.


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## PRR 60 (Apr 28, 2012)

CHamilton said:


> 2012 cost of operating a motor vehicle
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*Owning* and operating. The cost of operating a car you already own is in the mid-twenty cent a mile range.


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## Anderson (Apr 28, 2012)

PRR 60 said:


> CHamilton said:
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The answer is somewhere in the middle...it depends on what costs are wholly fixed, wholly mileage-dependent, and which ones are a mix. For example:

-Property taxes and license fees, when applied to cars, are generally fixed.

-Fuel is pretty much mileage-dependent.

-Maintenance is a mixture, but tends to be mileage-dependent.

-Insurance is a mixture as well...part of it is fixed, but if you drive a lot/have a long commute, you can expect to pay more; if you don't drive much, you'll often get a little bit knocked off the cost.

-Depreciation is...whatever your accountant makes it. You can depreciate based on mileage, based on expected ownership time, etc. If you drive a lot more than "normal", you should _probably_ assume that you're either going to own the car for a shorter period of time (i.e. 8 years instead of 10) or that you'll be doing extraordinary maintenance on the car to keep it in good condition, running up depreciation costs.

I would note that really, only the insurance (at a low level) and taxes/fees are going to stick around if you own the car but don't drive it. Depreciation may remain in some form, but a low-mileage older car can often fetch more at salvage (i.e. when you sell it) than one with a lot of mileage.


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## jis (Apr 28, 2012)

Anderson said:


> -Depreciation is...whatever your accountant makes it. You can depreciate based on mileage, based on expected ownership time, etc. If you drive a lot more than "normal", you should _probably_ assume that you're either going to own the car for a shorter period of time (i.e. 8 years instead of 10) or that you'll be doing extraordinary maintenance on the car to keep it in good condition, running up depreciation costs.


Contrary to popular belief depreciation does not add to the cost of anything in cash accounting. It is mostly an artifact of financial accounting to account for a cost spread over a longer period of time instead of recognizing it at the point in time at which it is accrued.

If all that you want is per mile cost of the car, depreciation is entirely irrelevant. you just figure out the net cost of the car by subtracting the disposal price from the acquisition price and divide it by the number of miles driven.


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## Anderson (Apr 29, 2012)

jis said:


> Anderson said:
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> > -Depreciation is...whatever your accountant makes it. You can depreciate based on mileage, based on expected ownership time, etc. If you drive a lot more than "normal", you should _probably_ assume that you're either going to own the car for a shorter period of time (i.e. 8 years instead of 10) or that you'll be doing extraordinary maintenance on the car to keep it in good condition, running up depreciation costs.
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Well, it depends on how you define "cost" in a sense, but I'll grant the point in at least one sense. It comes down to how you want to handle the cost of operating the car.

My inclination would be to write off much of the expected depreciation at the time of purchase (basically, taking into account "normal" use over a timeframe), and then add any extra wear and tear that you put on it.


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## Ryan (Apr 29, 2012)

PRR 60 said:


> CHamilton said:
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Tough to operate a car if you don't own one.


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## jis (Apr 29, 2012)

Ryan said:


> PRR 60 said:
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you borrow it from your rich uncle  Juuuust kidding!


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## Anderson (Apr 29, 2012)

Jokes aside, it would seem quite possible that a group of people might pitch in to collectively own a car (usually, they're called a "family"...j/k) or to put together a corporation to manage a small number of vehicles within the group (sort of what Zipcar does, albeit on a larger basis).


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## Ryan (Apr 30, 2012)

That's certainly possible, and people that do that should account for the ownership costs proportionally.

But for most of us, it makes no sense whatsoever to cherry pick what miles we choose to allocate the costs of ownership to.


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## foxe's nmentsdo (Jun 3, 2012)

good debate chaps - both convincing - depreciation etc

a lot of philosophu & different strokes 4 diff folks etc here

I have a 30 y/o car i hardly use - but am sure i could set off on a 5k km trip in the outback tomorrow. it does all i want - 6 seater, tows, wagon that lets me shift a piano on the roof & sleep in it if i must

so my costs for now are $1k taxes etc, $500 for this & that & ~$600 for gas pa.

if i had a big commute - gas would go up a lot - but i still have options like lpg or cng

put another way - those doing less than the miles quoted in a newish car have $ per mile #s that go ballistic

depreciation, finance, insurance - all ~fixed costs

people have a perception that newer cars are more reliable - perhaps true if u have no cars & r a bit at sea w/ them

but in my 60 years - bar rust - if its a basically good car - better the devil u know

sadly, i insure against the inevitable fender bender w/ idioys in their ruinous to repair pse mobiles, but have never had a car itself insured - i hate the insurance racket

if u cant afford to walk away - dont buy it - buy cheaper

even new - dramas seem common

a mechanic sage uncle used to buy demonstrators - let them sort the glitches

if u let a practical device like this be about ego - be it on your own head


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## jamesontheroad (Jun 17, 2012)

In the UK, the Automobile Association (AA) release similar figures, along with a breakdown of costs. They're available here: http://www.theaa.com/motoring_advice/running_costs/index.html

Assuming a car that cost £12,000 > £16,000 new and which covers 15,000 miles a year (as in the US study cited above) it works out at 45.5 pence per mile, about $0.72.

What with unleaded running at almost $9/gallon in the UK, we'd all appreciate it if everyone in America could quit complaining


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