Nobody Walks In L.A.
I was born and raised in Los Angeles. So naturally I love cars and car culture. I mean, I wouldn’t be caught dead walking from one side of an outdoor mall to the other. Like every other Angeleno, I walk out of the Best Buy, get in my car, and then drive the 0.2 miles to the other end of the parking lot to get my burrito at Chipotle.
Things were quite different when I moved to Tokyo. I survived over a year without a car, and guess what? I loved it!
In Tokyo, I bought an all-white urban bicycle for $700. On top of that, I spent about $125 per month in train & subway fare. There were a few times each month that I wanted to get from point A to B by taxi. That cost me $12 per ride. When I moved out of Tokyo 19 moths later, I was able to sell my bike to an incoming expat for the full $700. So, my net expenditure on day-to-day transportation over the 19 months was $4,199. This equates to $2,652 per year. (On top of this, I averaged about 4 miles walking per day, which was a great side benefit!)
How does $2,652 per year compare to the average American’s transportation costs?
Well, me being me, I answered my own question. Using various statistics (see bottom of post), it turns out that the average American spends $9,296 per year on his car…and this assumes he pays $0 per year in parking and toll road fees.
What shocked me was that if you divide that amount by the number of hours driven per year, the average American is spending nearly $20 an hour to use his car. If you drive one of those fancy German cars, well you’re much closer to $40 per hour. That’s crazy!
The difference between my walk/bike/train year in Tokyo and the average American is about $10K in pre-tax income. Clearly car ownership is more about convenience than it is about prudent personal finance.
There is light at the end of the tunnel though. In 2014 there were just 69% of 19-year olds who had a license versus 87% in 1983. Perhaps, there is hope for us yet.
Table of Statistics
|Average Miles Driven Per Year||15,921||U.S. Department of Transportation 2015
(35-54 Year Olds)
|Average Miles Per Hour||32||U.S. Department of Transportation 2015|
|Average Miles Per Gallon||25.3||Univ. of Michigan Transportation Research Institute 2015|
|# of Hours Driven Per Year||478||Calculation|
|# of Gallon Per Year||629.3||Calculation|
|Average Price Paid||$33,560||Kelley Blue Book 2016|
|% of New Cars Financed||86.3%||Experian 2016|
|Average % Down payment||10%||Experian 2016|
|Average Loan Amount||$30,032||Experian 2016|
|Average Monthly Loan Payment||$503||Experian 2016|
|Average Length Of Loan||68 Months||Experian 2016|
|Average Interest Rate||4.79%||Experian 2016|
|Average 5-year Residual Value||35%||Kelley Blue Book 2016|
|Total Down payment + Monthly Payments||$37,732
|Total Net Financing/Month||$382||Calculation|
|Monthly Car Operation Costs|
|Car Insurance||$110||Insure.com 2016|
|License, Taxes, Registration||$55||AAA 2015|
|Monthly Net Financing||$382|
|Monthly Operation Costs||$393|
|Total Monthly Costs||$775|
|Total Annual Costs||$9,296|
|Total Cost Per Mile||$0.61|
|Total Cost Per Hour||$19.45|