The Cost of Driving is WAY Higher Than You Think

As a general rule of thumb, transportation costs are supposed to be less than 15% of your annual income — that means that for a typical household in the U.S., with an income around $53,889, expenses should come out to about $8,083 a year or $674 a month.

However, as outlined with the tools below, the actual “cost of driving” is A LOT higher than you think and most people, regardless of what they assume they pay, actually pay a whole lot more.

Gas Costs are only a Fraction of Total Car Costs

The biggest misconception about car ownership is that gas is your primary expense. This, however, couldn’t be more false. In actuality, gas costs, in relation to other expenses that come with car ownership, are actually quite low.

For example, imagine you live in Houston, Texas and gas is $3.00 a gallon. Assuming you drive an estimated 18,478 miles a year, your total auto costs would be around $12,370 a year or $1,031 a month — but when we break down these costs by individual expense, then only $2,566 of that would go to gas while the rest — $9,803 — would go to general ownership costs (insurance, maintenance, etc.).

And even if we were to adjust gas costs lower, say to $2.30 a gallon, then it still doesn’t really change your total costs — gas costs would go from $2,566 a year to $1,968 a year (or $164 a month) — saving you roughly 4.8% a year and barely making a dent in total ownership expenses.

Yearly/Annual Car Expenses for Houston, Texas

Yearly/Annual Costs	Household Car Ownership in Houston with Gas at $3.00 a Gallon	Household Car Ownership in Houston with Gas at $2.30 a Gallon
Ownership Costs:	$9,803	$9,803
Gas Costs:	$2,566	$1,968
Total Auto Costs	$12,370	$11,771
What Your Budget Should be if Going by 15% rule	$8,947	$8,947

Monthly Car Expenses for Houston, Texas

Monthly Costs	Household Car Ownership in Houston with Gas at $3.00 a Gallon	Household Car Ownership in Houston with Gas at $2.30 a Gallon
Ownership Costs:	$817	$817
Gas Costs:	$214	$164
Total Auto Costs	$1,031	$981
What Your Budget Should be if Going by 15% rule	$746	$746

So what’s the main expense? The car itself.

Unlike gasoline (or any other fuel), the car itself requires a certain number of reoccurring payments, and unfortunately for the owner, they are usually quite high.

And even though it may seem like gas is the main expense because it’s what you see leave your wallet every day, this is a false sense of reality.

Because regardless of what the gas price is and how much it fluctuates, the true cost of owning a car is what physically sits in front of you — It’s the vehicle and everything that keeps it “alive.”

The True Cost of Driving a Car

The true cost of driving a car is a combination of two things: (1) direct costs, and (2) indirect costs.

Direct costs of driving a car — These are costs that YOU directly pay for because they are out-of-pocket expenses.

• Car Insurance
• Registration Fees
• Motor Vehicle Taxes
• Fuel/Gas Costs
• Car Maintenance and Tires
• Residential Parking
• Other Parking
• Tolls (if applicable)
• Travel Time
• Car Payments or upfront buying costs
• Accidents (if applicable)
• Depreciation

Indirect costs of driving a car — These are costs that YOU indirectly pay for because as a result of your driving, the government (whether local, state, or federal) pays them with taxpayer money.

• Government paid accident clean-up
• Maintenance/construction for local and state highway operations
• Highway cleanup/waste disposal (tires removal, oil removal, etc.)
• Road noise construction and mitigation
• Water pollution impacts and mitigation measures
• Congestion costs
• Air pollution mitigation and damage costs
• Land-use impact costs
• CO2 reduction measures
• Local and State construction, repairs, and clean-up

These factors, or at least a combination of them, are the actual costs of owning a car. It goes beyond what you physically see leave your wallet and into a much more complicated, invisible set of expenses.

To understand this better and to break down each individual expense, use the “cost of driving” tools below.

Cost of Driving Tools

There are several tools available to help you understand car ownership costs. Use them, learn from them, and share them with others.

Total Driving Costs Tool

The Total Driving Costs calculator is an interactive tool created by CNT and the Housing and Transportation Affordability Index. Open the tool and search any location in the United States to find and compare ownership costs and gas costs.

Use the gas slider to adjust gas prices, compare annual and monthly ownership costs, and calculate your total driving costs budget.

Fuel Economy Trip Calculator

Use the Fuel Economy Trip Calculator by the Department of Energy to compare vehicles and estimate fuel costs for any given route across the U.S. — add vehicles, remove vehicles, and edit vehicles to personalize fuel prices and miles per gallon.

True Cost of Driving Tool / Cost of Driving Per Mile Tool

Calculate the cost of your commute using the True Cost of Driving calculator. Open the tool and input your driving information — work miles, number of days you drive, non-work miles — to calculate your annual vehicle mileage and how much you’re really spending in driving costs.

*The tool calculates both direct and indirect driving expenses in cents per mile.

Cost of Commuting Calculator

Use the OmniRide Cost of Commuting Calculator to calculate the cost of using public transportation vs driving a car. Input your information into the boxes, hit submit, and scroll to the bottom to see how much money you can save using public transportation.