joao_pimentel

Hi guys

Look at this simulator of how much motorists spend on their car!!
Really amazing, how much the money it can reach...

https://autocosts.org/index.php?c=US

if someone has a car, can he or she kindly share the results?

thank you

Roody

Good link. Thanks for posting and welcome to LCF.

I don't have a car, but I know that just the fixed costs of the household car are $550/month. This is not including variable costs like fuel, repairs, parking and so forth.

prathmann

For my car the website came up with $149/month. But most of that was for depreciation which it assumed was at a uniform rate over the 17 years I've had the car. Actually most of the depreciation occurred in the first few years and the annual rate now is pretty minimal.

Roody

There are so many ways to figure out depreciation. I wish there was an accountant on this forum to explain this complex question as it relates to car costs and monthly budgeting. Most often, the residual value is subtracted from the purchase price, then divided by the months owned. But this yields a uniform depreciation rate, which I guess is not what you want.

joao_pimentel

Hi

You don't need an accountant, I studied math

Obviously, that the depreciation is different at each point during the life time of the vehicle, because the instant depreciation actually accounts for the infinitesimal amount of money car loses at one infinitesimal amount of time.

Though, because we make measures at discrete points (days, weeks, months, years) we can calculate the point depreciation just by subtracting two discrete measures. For example if we make measures on a daily basis, the car value in the 2nd of January minus the car value on the 1st of January, will give you the daily depreciation on the 2nd of January.

Then you'll realize that the common depreciation of a car it's not at all constant, normally it's higher on the beginning and lower after some years.
BUT, just making the difference and dividing by the number of months, like you said, and like it is on the simulator, you get THE AVERAGE monthly depreciation during that period of time, and that's exactly what motorists pretend to know.

Any doubt, please say

Roody

It seems like a good figure for the motorist/consumer would be the average monthly depreciation rate for the expected life of the car, or rather for the time he/she expects to own the car. Does that make sense?

joao_pimentel

Not that much, because the motorist doesn't know the future, he doesn't know how much the car will value within 5 years, but he knows for sure its value today.

Of course, he can predict, but imagine that in the meantime he has a car collision or any unpredictable event, then the car value drops immediately. Or the other way around, imagine he finds out the car, actually is a classic, then the car value increases unexpectedly.

So, the simulator gives you the true average monthly value, the motorist already lost due to depreciation, not the estimated value

joao_pimentel

btw, I am the webmaster of that site...

please kindly tell me if there is any term or expression, which would be more suitable for american motorists..

thank you

Machka 

Car is an expensive toy.

Toy?

I know some people own cars for recreational purposes ... maybe they build up hot rods, or have a nice sports car for cruising on nice days ...

But our vehicle is a functional tool ... not a toy.


Rowan works about 35 km away. There are no busses or other public transportation that would get him where he needs to go at the hour of the morning he needs to be there.
He could ride his bicycle, but 70 km/day over several good-sized hills would be very time consuming (3-4 hours/day). 70 km/day over several good-sized hills is also tiring ... especially given that his job is quite physical too.

Rowan could have taken a job closer to where we live, but it would have paid less.

So ... when you include all the various factors into the equation ... the functional tool becomes quite inexpensive.


One additional little detail ... if Rowan were able to take the bus (and arrive a couple hours late for work), it would cost him about $120/week ... $6000/year. More than what it costs him in fuel to drive. You'd have to subtract that amount from whatever total your online calculator comes up with ... he's saving $6000/year by driving.

joao_pimentel

wrong, each case is one different case, but that's wrong if you take the overall approach to the problem

do you know the concept "virtual speed"?

Imagine Rowan makes all those calculations on the simulator and gets something like 20$ per working day just for car (running and standing costs). Imagine Rowan earns 5$ per hour. Then he would need to work 4 hours per day just for affording his mean of transport.

If he lives 35km away from his workplace and he gets there in 30 min, his true average speed would be 70km/h.

Though, I remind, Rowan spends more 4 hour per day paying his car, working time budget strictly allocated for paying his car, so the Rowan virtual speed would be 35/(0.5+4)=8 km/h, just 11% of his true speed.

It means that if Rowan sold the car and found a job in front of his home door, earning one fourth of the money, would still be a good option

Or if Rowan sold the car and went by bike to that working place away 35km, and he just worked part-time, was still a better option.

Yes my friend, if you start to make the true calculations, car is a very expensive toy

Machka 

Ah I see ... it all comes clear now.

joao_pimentel

I don't get what comes claer!

Machka 

I like all the assumptions going on here ... not based on much in the way of reality at all.

For one thing ... no one earns $5/hour!! It's been decades since people have been paid that low.

joao_pimentel

I just gave you a simple example...

Some studies, which refer more to reality seen on a broader point of view, say that on average, the virtual speed of a common motorist in the western world, is around 12km/h

Machka 

Sorry, but ... I just did a calculation based on reality, and our current situation, complete with the use of our functional tool (van), is the better choice.


Every situation is different. Over the past decade, my husband and I lived and worked in quite a variety of situations, and have had colleagues in all sorts of different living and working situations. Your assumptions and calculations might be applicable in some situations, but will fall over in others.


Another example ... I lived in one town, and went to uni in another 150 km away for 4 semesters. The decision was: drive up and back vs taking an apartment in the city with the uni. Because of my schedule, for 2 semesters, it was cheaper to take an apartment in the city and commute by walking and public transportation. But for 2 semesters, it was cheaper to drive up and back. So while my car cost me money (especially in fuel), it was less than rent.


Each person has to make their own calculations and decide for themselves what is most financially feasible for them ... and many factors come into play in those decisions.

Artkansas 

Machka is demonstrating the use of sarcasm.

Roody

That's interesting, and it should be helpful to some people. Of course, no simulator or calculator can account for non-economic factors that go into personal decisions. But if people do figure out the economics, it will help them to make better decisions. And certainly it has been widely demonstrated that most people underestimate the costs of a car.

joao_pimentel

of course, each case is different from another, but we can make some overall approaches to the reality

I completely agree, and the simulator serves exactly to help people to make a more reasonable and trusted choice on their mobility issues.
But of course, we are free to spend our money wherever we want, even on a helicopter to go to work, for sure we get there in 5 minutes, and "time is money"

I got it

joao_pimentel

It was an example, I have no idea at all, how much people earn in US, as I am from Europe, Portugal to be precise

Machka 

Ah I see ... it all comes clear now.

So ... why are you creating a US calculator? Why not a European one?

joao_pimentel

if you go to the top right corner of the simulator, you have several country options, including many european countries

Machka 

I changed the country to mine, but it still says:

"This simulator will allow you to find the true cost of owning a car in the United States."

joao_pimentel

it was a mistake. Thank you very much for the correction, it is already OK
https://www.autocosts.org/index.php?c=AU

joao_pimentel

btw anyone here from Canada??

I'd just like to know what standards used in Canada

- km/mi for distance?
- which standard used for vehicle efficiency
- how do you show fuel prices? per litre or per gallon

Any particular term that the US version does not apply

if you could help me on the canadian version, I'd be glad

thank you so much

Machka 

I'm from Canada and Australia.

In both places, we use the metric system.