Saving Pennies or Dollars is a new semi-regular series on Money360, inspired by a great discussion on Money360’s Facebook page concerning frugal tactics that might not really save that much money. I’m going to take some of the scenarios described by the readers there and try to break down the numbers to see if the savings is really worth the time invested.
Ron writes in: Does it really save a lot to ride a bicycle around town instead of driving? I have a Ford pickup that gets about twenty miles per gallon If I were to drive to the post office and the grocery store, it would be a four mile round trip. From what I can see, that bicycle ride would only save me about sixty cents in gas.
This is a lot trickier than it sounds. The biggest reason is that the cost of using your truck for this excursion is much greater than just the cost of gas. So let’s start by running through these expenses.
Gas If gas is $3.50 a gallon and your vehicle gets 20 miles per gallon, that’s $0.18 per mile just for gas.
Prorated cost of the vehicle Let’s say you bought this truck for $15,000 and intend to drive it for 100,000 miles. That means that the cost per mile for the vehicle itself is $0.15.
Oil If you can get your oil changed for $30 every 3,000 miles, you’re adding $0.01 per mile to your drive.
Other maintenance This varies so much from vehicle to vehicle that it’s difficult to estimate, but I’d put it at at least $0.03 per mile.
There’s also the fact that some number of failures are going to happen while you own the vehicle, which has to be prorated into the cost. If you have three repairs of $1,000 each, you’re going to be spending $0.03 per mile to effectively cover those repairs.
Insurance Insurance needs to be prorated into every mile that you drive it, too. If you drive it 1,000 miles a month and insurance costs you $80 a month, you’re spending $0.08 per mile to cover insurance.
That’s $0.48 per mile, right there.
If your trip to the post office and the store requires four miles of driving, then you’re burning $1.92 in that short trip.
Now, what about that bicycle? The bicycle I own cost less than $100 and requires no upkeep other than air, which I get for free at the gas station. I’ve ridden on it for thousands of miles by now, which gets me down well below $0.10 per mile in cost.
Riding that trip, for me, would cost about $0.30 on my bike, give or take.
Clearly, riding a bike for simple errands is less expensive than using a vehicle. However, the vehicle is going to be quicker than the bicycle. How much quicker depends heavily on where you’re at. For example, I can get to many destinations within my town almost as quickly on a bicycle as I can in a car because I can take shortcuts through parks, utilize bike lanes, and so on. This varies a lot depending on your community.
There’s also the fact that bicycle riding is far better for your health than driving a car. The exercise you get while riding a bike has health benefits in the long term and energy benefits in the short term, a value which is again hard to calculate but leans toward the bicycle strongly.
Is riding a bike around town going to save you a mint? No, but it will save you a little and it’ll improve your health at the same time without adding too much time to your day.