Friday, March 11, 2011

High Gas Prices Cause Me To Laugh All the Way to the Bank

We all have choices. You can commute long distances to work or you can live close to work. You can drive a fuel efficient car or you can drive a gas guzzler. I live close to work and drive a fuel efficient car. That is my choice. I have heard numerous coworkers of late complaining bitterly about the gas prices and they all share two things in common. The live far away from work, at least compared to me, and all drive full sized trucks. Those are their choices. They all reason that they need their trucks for occasional hauling and can't afford to have yet another vehicle that they need to insure, register, etc just for commuting. They also say they like living further away from work for a variety of reasons. So it got me to thinking what the actual financial ramifications to their decisions are. So I compared my situation with one who works 50 miles away.

The variables for me were:

  • 4 mile round trip commute
  • vehicle that gets 36 miles/gallon
The variable for my coworker were:
  • 100 mile round trip commute
  • vehicle that gets 16 miles/gallon
Both of these are actual distances and mileage and I figured on current gas prices of $3.50/gallon for an average of 220 working days per year. Doing the math, my gas bill commuting back and forth to work for the year is $78.00 and theirs is $4812.50 meaning I save $4734.50 per year because of the choices I made. That is quite a bit of wampum that my coworker could use had they made a similar choice as me. For example, it would almost completely fund a Roth IRA for their retirement, something that they currently admit that they don't do because they can't afford to.

Granted not everyone wants to live in town, including me and not all areas offer the same appeal so giving up the 50 mile commute for one that is 2 miles is not always an option. But lets say that if my coworkers were to trade in their Chevy Avalanche for a Honda Civic to commute. They would cut their gas bill down to just $2138.89 per year or a savings of $2673.61 over what they are paying now. That is more than enough to cover the cost of registration and insurance for the vehicle and if bought used, would pay it off in short order. Or if you traded vehicles, not only would your insurance and registration costs go down as well as the depreciation costs since you would be trading into a cheaper vehicle, but almost $2700 a year would pay for a lot of delivery charges for those times when a car just isn't big enough.

To me, this all seems obvious but so many people I mention this too seem completely baffled. Especially when my coworker and I have both been in this situation for almost eight years now. Granted the gas prices haven't always been this high but had they been, I would have pocketed an extra $38,000 due to my choices. More than likely I have pocketed $25,000 over that eight years over my coworker. That my friends is a whole lot of wampum.

7 comments:

geri said...

Yesterday, full tank of gas was a (10 gallons plus - yes, I was really low on gas) whopping $40+, it usually is $30. Like you I am thankful that we live close to everywhere we need to go and have a fuel efficient car.

BUT 2 miles from work is really close and I thought my 3.5 mile distance from my work before was near... Do you sometimes walk to work? Just curious.

During that blizzard in the news they interviewed a woman who works in Chicago but goes home to Madison. My reaction was $#@%$! That's a good 150 miles!

Ron said...

Those little savings certainly add up. Personally, I'm quite happy towing a lightweight trailer behind my 38 mpg Saturn sedan, when I need to.

Ron

sage said...

I use to have a mile to drive to work, now it is 3 miles (work moved)... But I confess, I do drive a full sized truck which I wonder about keeping with high gas prices, but it's been paid for a long time so I figure I can pay higher gas prices for a while

Vince said...

BWAHahahahahahahahahahaha-aaaaaah gasp-bwahhahahahahahahahah.
Last evening I put 13.62L @ E1.469 into the car, to top it up. 20 euro worth($27.54) for slightly less than 3 gallons. Or $9 a gallon.

Ed said...

Geri - I used to bicycle but since I have to drop off and pick up my daughter on my way to work in a timely manner, I drive.

Ron - I too have a hitch and small trailer for my Civic. It gets me most things and I think I have paid for delivery on other things only a few times in the last seven years.

Sage - Yeah but the economics of trading in for a fuel efficient car for a three mile commute probably couldn't be justified in your case. It's the long miles that really make the justification.

Vince - I'm sure I've said this before on this blog but we Americans are extremely spoiled with our still very cheap gas prices. My world would look a lot different with $9 gas.

Vince said...

Yeah, you Yanks being spoiled is one way to look at it. Another is that our Governments are shafting us.

R. Sherman said...

If I don't have to go anywhere, I wind up driving only a 12 mile commute. Good times.

Cheers.