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The Annual Cost of Owning a Car is $8,776. What About Other Modes? A Back of the Envelope Calculation


From Hilary Reeves, Communications Manager


AAA released last week their report on the annual cost of owning a car, about $8776 for a sedan, $11,239 for a SUV. They calculated based on gas at $2.88 per gallon, so these costs are somewhat low given the current price of gas. The report includes a worksheet for calculating your own costs. The basic categories are:

  • Operating costs, including gas, maintenance, and tires
  • Ownership costs, including depreciation, insurance, taxes, licenses/registration, and finance charges
  • Other costs, including washing, accessories, etc.

I began thinking about how a person would calculate these buckets if they regularly used transit or got around by bicycling or walking. Based on the calculations below (which are based on personal experience not exhaustive research), the annual cost for each mode are:

  • Mid-sized sedan = $8,776 (AAA report)
  • Transit = $1,810
  • Bicycling = $680
  • Walking  = $250

Of course one key factor to using transit is being near bus lines or LRT stations. Metro Transit buses and trains have bike racks, so “nearby” is a little farther away. There also are options, especially in the Twin Cities, for car-sharing and bike sharing. HOURCAR car-sharing has monthly membership fees from $5-$15, plus trip fees. Nice Ride Minnesota annual subscriptions are $60 for unlimited ½ hour trips. And for a limited time this spring, Nice Ride subscriptions are on sale for $40.

AAA links:
News Release
Report (pdf)

Using the chart in the report from AAA, my estimates are as follows.

Transit:   Annual cost $1810 

  • Operating = $0 in terms of gas, maintenance, and tires. The local bus system does have these costs.
  • Ownership costs = $30/week or $1560 per year for a GoToCard, based on rush-hour fares and not counting the 10% discount.
  • Other costs: maybe better shoes for walking, rain coat, umbrella, occasional cab fare for missing the bus. Let’s say $250.

Bicycling:  Annual cost $680.

  • Operating   $190-$280

For bicycles, the annual maintenance, assuming you already have a bike, is an annual tune up, new tires, new bike lights or batteries each year. A local bike shop offers tune ups for $70-$160 (basic tune up to bike overhaul). Last year a set of commuter bike tires cost about $80. A new bike light is around $40.

  • Ownership:  $250

None of the categories on the AAA chart work for bikes. Some things particular to bikes might be a place to park it. Or perhaps, if you are a year-round rider, a second bike for the winter rides. The Sibley Bike Depot has refurbished bikes from $130-$350.

  • Other:  $150

For bikes, there are some accessory costs, especially a good helmet and visible clothing. For winter cyclists, gloves and a good hat. Figure $40-$60 for a good helmet. For jackets, there are a lot of opinions out there about what breathes and keeps you dry and warm. The options for dropping money are equally wide-ranging. Figure $70 and maybe that’s more than you need, much less than you might spend. Accessorizing you and your bicycle can be as expensive as you like. You’ll need some kind of messenger bag or panniers for your stuff. I got a perfectly useful over-the-shoulder bag at a campus bookstore for around $25.

Walking: Annual cost = $250

  • Operation—mostly your body, with clothes and shoes.
  • Ownership—ditto.
  • Accessories—well, wardrobe is limitless.

Costs attributable to getting around on foot:  good pair of shoes, umbrella, rain coat, hat, gloves.


  • The AAA report calculates a cost per mile. They estimate the cost per mile for a mid-sized sedan driven 10,000 miles in a year is 73.9 cents.
  • There is some data that the average length of a bicycle trip is 4 miles. If that’s twice a day for a year, the total is 2080 miles. With annual costs of $680, that’s 32 cents per mile. One regular commuter I know logs around 15,000 miles per year as a bike commuter. He may spend more, being a year-round guy, but using our figures his cost per mile would be 5 cents.  
  • If we guess that a person walking (to transit or to nearby work) walks 1 mile each way, that’s 520 miles a year. With annual costs estimated at $250 thats48 cents per mile.


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Every other time I've seen AAA cost compared to bicycle costs the bike costs have been unrealistically low. The version here does seem realistic. For comparison, I came up with $750/yr, but I've got some mid-to-higher-end stuff, like lights.

There is much much more to it than meets the eye. I commute 15,000 miles a year and my bike expenses are somewhere around $1,200 which includes parking, washing and maintenance. My bike cost 800.00 and is 5 years old and is not worn out yet. and has about 45,000 miles on it. That averages to be 12.5 to operate and 1.7 cents for the bike.

We need to rethink these comparisons because my big money is in my health. I don't need any medications, i don't have any heart problems or other organ problems, I am not depressed and my knees, hips and joints work pretty good for 57 years old.

I also am saving huge amounts of money on buying only what I need and not piling up stuff to through away. I also save on entertainment and healthclub memberships.

Agreed it is a lifestyle and we can't dictate that to anyone. We are free too choose as long as we are not bound by our missunderstanding of worth that is somehow influenced by marketers etc. P.s I enjoy the finer things in life too. I just choose to spend my 8,000 a years savings on local things not gas and foreign cars. (p.s my bike is a foreign bike so not entirely true)


This a telling comparison of mode costs, however another important factor to compare is travel time. Sometimes driving is the quickest, but not always. When you consider the time to get to your car, average drive time including congestion delays, plus time to get from the parked car to your final destination, you can find that biking is quicker. And using transit can be quickest if service is easily accessible and sufficiently frequent. But in any case travel time is a real cost to be considered.

Did anyone calculate that before. The total figure is so high. It includes all from the gas you buy to the service it requires.

Well... it's about time they fixed up those bike lanes so we can leave the cars at home!

Owning a car now-a-days is really hard to cope with, i wish there were ways to get new cars way cheaper. prices are to high for to many people

We are spending so much for something that is not so needed. We could have given some part of it to an organization.

Thanks for posting. I just spent a ton of money getting some electrical stuff fixed as well as an HID kit to brighten my lights. Cars are certainly expensive!

Cars are intricate machines that always seem to be failing. With all that could go wrong with your vehicle, it may seem to make sense to opt for cheap replacements.

Everyone knows that cars are expensive. In addition to the cost of acquisition, there's maintenance, insurance and the ever-increasing cost of gasoline. We all know that those costs add up, but few of us know exactly how much it really costs to own a car.

The factors included in our owner cost estimates are depreciation, fuel, interest on financing, insurance, sales tax, and average maintenance and repair costs you can't find anywhere else. Because depreciation is factored in our estimates, we assume that the vehicle will be traded in at the end of the term (after one, three, five, or eight years). No matter how long you own your new car, checking out these estimates can save you thousands of dollars by the time you sell it.

Very interesting info. I wish cities would make mass transit more viable and convenient.

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