Why have a car at all?

Public transport seems expensive, but that’s just because people look at it in the wrong way. I drive an 11 year old BMW 528i sport, and I’ve prepared the table below to try and take the emotion out of this question.

Historical Car Costs
Variables
Petrol	per litre	£1.34
Petrol	per gallon	£5.96
MPG		28
Mileage	per month	729
Expenditure		Per month	Per Mile
Petrol	variable	£155	£0.21
Insurance	fixed	£57	£0.08
Road Tax	fixed	£18	£0.02
Parking	variable	£80	£0.11
Depreciation	fixed	£109	£0.15
Breakdown cover	fixed	£7	£0.01
Maintenance	variable	£125	£0.17
Analysis		Per month	Per Mile
Total Cost		£551	£0.76
Fixed Cost		£191	£0.26
Variable Cost		£360	£0.49

The table shows that, over the four years I’ve owned it, my car has driven an average 729 miles per month.  The car cost £6,750 and I think it’s worth about £1,500 trade in (www.webuyanycar.com says that it’s worth just £600 today!). So the fully loaded cost per month is £551, of which variable costs (maintenance, fuel and parking) come to £360 – or £0.49 per mile. How does that compare to public transport?

My daily commute from Hale to Sheffield (about 40 miles each way) on the train costs £18.70 per day – less if you buy a season ticket – or £0.47 per mile. The local bus costs £2.50 return to the airport - about £0.36 pence per mile.

Broadly, if you were to assume that I’d have the car anyway, from this sample of one, the variable cost of public transport is less than travelling by car, but not significantly so. Of course the utility of my nap and reading (and blogging) is forgotten in this analysis!

What about time? Is that not the major element of “personal utility” to consider? As it happens, it takes longer to drive to Sheffield than to go by train, so the answer there is easy. If I need to go to Liverpool (about the same distance and about the same public transport cost) the answer is also easy – it takes twice as long to go by public transport than to drive (there’s 35 miles of motorway between me an Liverpool, there’s lots of twisty, narrow roads and hills on the way to Sheffield).

If you take into account the fixed costs (like insurance) and the sunk costs (like the depreciation), then the answer changes, but not in a simple way. Sheffield is both quicker and cheaper by train than by car – no brainer. Liverpool is less clear: does the extra £35 cost on the car journey outweigh the extra two hours spent on the round trip? And anyway, is it right to take into account all the costs (even those that are sunk) in the comparison?

The fully loaded costs of travel by public transport (£0.47 per mile) compared to the fully loaded costs of car travel (historically £0.76 per mile) shows a massive cost advantage to public transport. At first sight, that looks  a fair, “apples to apples” comparison. Not so: from my point of view, the only costs that really matter are direct, future and relevant costs. What’s gone has gone. If I’m going to have a car anyway, then the only relevant costs are the variable costs of the journey, which is petrol, wear and tear, parking and the personal utility of driving compared to the train ticket and the personal utility of sitting on a train. That comparison correctly shows that the financial costs of public transport are more or less the same as using a private car. It’s the other “personal utility” items that make the difference. I could only save the fixed costs by giving up the car entirely!

I walk to the station to go to work; Sally has a car and there are almost no occasions when we are both out at different places where we both need a car. Usually with a bit of forethought, even on those few occasions we could organise lifts or drop each other off.  I could  get a taxi or a bus. In fact, I like public transport; you meet people, you can read, or sleep, or, if you get really bored, work! There’s no stress (apart from when the train’s late)  and it’s more healthy – I walk 2 miles a day just to and from the station at the ends of my train to work. So why have a car at all?

The table below shows my estimate of  the costs of keeping my car for another four years:

Car Costs - Future
Variables
Petrol	per litre	£1.34
Petrol	per gallon	£5.96
MPG		28
Mileage	per month	350
Expenditure		Per month	Per Mile
Petrol	variable	£74	£0.21
Insurance	fixed	£57	£0.16
Road Tax	fixed	£18	£0.05
Parking	variable	£5	£0.01
Depreciation	fixed	£31	£0.09
Breakdown cover	fixed	£7	£0.02
Maintenance	variable	£60	£0.17
Analysis		Per month	Per Mile
Total Cost		£252	£0.72
Fixed Cost		£113	£0.32
Variable Cost		£139	£0.40

The fully loaded cost per month will be significantly less in the future, because of reduced mileage these days and the depreciation being less in the future (the cost per mile is also reduced, but not significantly so). I can save £252 per month (as long as I don’t spend it on taxis or extra bus fares) if I give up my car.

So presented with the hard facts of the case, I can see that I could save £252 per month. Hard-headed, emotionless accountant types (who of course never buy anything just because they want it, do they?) would say take the money! But, I’ve always had a car (at least for the last 30-odd years). And I can justify keeping it: it might be the case that I need a car in the future to go to work; and the car is in good nick and I wouldn’t be able to buy one as good for anywhere near its value. But…, and…., and…so on.

You see (and you probably knew this already) when I actually face the decision, I discover that it isn’t about money, it’s about feelimgs – I like driving a silver BMW that goes far too fast; it’s a great car to drive, it goes round corners like it's on rails, the faster you go, the better it seems to like it. It’s stylish and elegant and not as butch and aggressive as the later models, and BMW drivers get a wide berth on the road (which, when you’re a driver of my quality is a good idea for all concerned)!

Who would, given the choice,  swap a really nice, somewhat worn BMW,  for a bus? As it turns out, not me!