The Canadian Automobile Association (CAA) has released it's latest Driving Costs brochure to help you understand how much it costs to operate a vehicle every year. While we often focus on the most direct costs - fuel and maintenance, it's interesting to see the total cost break down per kilometre for other things such as insurance, license fees and depereciation.
Not surprisingly, the total cost of driving a car, according to CAA research, has almost doubled in the last 23 years from 20.1 cents per kilometre driven in 1985 to 38.5 cents per kilometre in 2008. What's behind that change? Should my wife have kept that sassy late-80's burgundy K-Car she drove while at University? Answers to all this and more below...
The researchers at Fuel Focus Canada looked at the CAA annual numbers over an extended period of time, added further data from NRCan and found that while the average price of gasoline rose from 54.3 cents per litre in 1985 to 81.2 cents per litre in 2008, the fuel component of the total operating cost dropped from 28% to 18%.
So, for every dollar you spent on your vehicle last year - a dime, a nickel and three pennies went into the fuel tank. Or put another way, for every kilometre travelled last year, the average Canadian spen 6.79 cents on fuel, 2.36 cents on maintenance and 1.55 cents on tires. While fuel was up just over a penny per kilometre in the last 23 years, maintenance and tire costs tripled.
"Variable costs, which include fuel, maintenance and tires, still account for about one third of the total operating cost. However, while the fuel portion made up 81% of the variable costs in 1985, fuel was only 63% [in 2008] because maintenance and tire costs increased more quickly."
As for Fixed Costs (measured in dollars per year), Insurance costs rose from $716 a year to $1780 and Depreciation costs were up to $4001 per year from $1733 in 1985.
To help you understand what it all means to you, the CAA ran the numbers for a Chevy Cobalt and a Chrysler minivan (no 1985 K-Cars) and breaks it down by annual kilometres driven. It's a quick and worthwhile read as it shows where you are spending the most money - and where you can potentially save with better driving habits (see tires and maintenance).
Now the K-Car was long gone before I met my wife, but it's interesting to see how times have changed since then. While vehicles have improved a great deal since the 1980's, they simply cost more to operate. That doesn't mean you can't pop a little Duran Duran into your car stereo, join Simon Lebon in a "Rio" duet and dream of the days of cheaper gas and insurance. That may not help you but it will feel good. If you want to bank real savings and you grew up in the 80's, think of how much less you are spending on hairspray and mousse these days.
Photo Credit: conradh
23 years is an interesting choice for a time frame. Not sure why they chose this number but I have a pretty good idea. I wasn't driving in 1985, but I did start driving in 1991 and I remember filling up at a price of around 45 cents in the early 90s. I also don't believe that the average price for gas in 2008 was 81.2 cents. How can you arrive at an average of 81.2 cents, when there were times last year it was well over $1.00, and when the prices recently dipped to the 80 cent mark people were noting it was the lowest price in years. The math just doesn't make sense.
I have to question the motives behind this report - the numbers used seemed to be chosen to make the rise in the cost of gasoline seem less than it is. Why not do a study of the last 15 years, or 10 years?
Posted by: Derek | June 23, 2009 at 01:16 PM