As I have written elsewhere, biking to work comes in two basic flavors –“replace your car” and “supplement your car.” I’ll start with “replace your car” because that is the scenario that can save you an insane amount of money.
According to a recent article in AAA Traveler Midwest magazine, the cost of driving an average car a total of 15,000 miles in 2011 was $8,776. This consisted of gas, maintenance and wear, insurance, license and taxes, depreciation, and finance charges. The costs were higher for an SUV ($11,239) or van ($9,489), and remember most households have multiple cars. (The Bureau of Labor Statistics reports that Americans spend more on transportation than on food.)
If we stop at “Your car cost you $8,776 last year,” or “you paid $39 a day to drive to work” (8,776 divided by 220 days at work), that is impressive enough, but we haven’t gotten to WYHTE yet. WYHTE stands for What You Have To Earn (to spend a dollar), and it is a truer measure of what you are actually spending (and saving) because it differentiates between pre- and post-tax money.
Let’s say you are in the 15% tax bracket, and you donate 10% of your income to charitable causes. Those deductions mean every dollar you make is actually only worth 75 cents. The result is that in order to spend that $8,776 for your car, (8776 x 1.25) you actually have to earn $10,970 every year. The League of American Bicyclists puts the annual cost of biking to work at $308 (or $385 using the WYTHE principal).
Think honestly about the reasons you drive to work, then think about the cost. Are your reasons really worth $10,585? (There are no right or wrong answers here, just values and priorities.)
Now you say, “Kwin, you’re making me feel bad about driving a car, but my situation really requires that I drive sometimes.” I believe you. I know people whose current job or circumstances require them to drive to work occasionally. What if you really can’t get rid of your car? What are the savings from riding 100 days per year?
The IRS figures that driving a car costs 55 and a half cents per mile, so let’s use this as our variable cost. If you live ten miles from your place of work, your commuting cost is $11.10 per day (20 miles x .555) or $1110.00 over the course of 100 days. Using the WYHTE assumptions above, those hundred days of driving cost you $1,387. What would you do with that each year?