How can people afford cars?

Hello,

Some more about the economics.... Background: at the minute I live outside of london and do a fair few miles for my job, so I've worked this out quite closely because it makes quite a bit of difference to my cashflow! I also ran a car while being a student (for a variety of reasons), so I'm also had experience running a car on a really tight budget.

Basically, it's quite easy to run a car for a total cost of ownership between 20-35p a mile (including fuel, tax , service, depreciation, everything!) for a quite a wide range of number of miles per year (anything from 4000 -> 30000)

Typical example (low mileage):

Car cost - £1500 (8yr old Honda Civic, say, enough for a family, reliable, economical)
Finance cost at 6% - £90
Depreciation at 20% - £300
Annual Service - £150
Insurance - £400
Tax - £150
Fuel 6000miles at 15p a mile - £900
Consumables (tyres, oil, etc.) 3p a mile - £180

So, fixed costs per year of £910 or £2.50 a day. Variable cost of 18p a mile with a total cost of £2170 or £6 a day. Total cost per mile is 36p. Do 12000 miles and the per mile figure drops to 27p.

35p per mile is about the same price as the train for long distance routes, if you can get a cheap train ticket (a big "if", especially if you have to travel at peak times), so you're winning as long as you do a reasonable number of miles.

If you do lots of miles, it pays to "buy" fuel economy by trading it off against depreciation. For example, get a newer turbo-diesel:

Car cost - £8000
Finance - £480
Depreciation - £1600
Service - £400
Insurance - £400
Tax - £150
Fuel 25000miles at 11p a mile - £2750
Consumables (tyres, oil, etc.) 3p a mile - £750

Fixed costs are then £3030 or £8.30 a day, variable cost 14p a mile, total cost £6530 or £17.90 a day, giving a cost per mile of 26p.

What I'm saying is that if you travel more than about 100miles a week cross-country, a car works out cheaper than a train, and far more flexible: if I were to replace my regular work car journeys with train trips, one wouldn't be possible (it would have to be a cab or a very long bus route) and the others would more than treble my travlling times for a similar in cost. Using the train really isn't worth it! In town, and for local journeys, I cycle - if that's all I did, I'd sell my car. And I agree, owning a car in central london is a bit excessive.

This is where change is needed if we're going to cut car usage. Trains have to be better and, most importantly, cheaper than driving. And everything possible should be done to force people out of cars in the city centre. Here's where green taxation really has a use, assuming it's done such that the net tax increase is zero (i.e. green taxes should be used to reduce the tax bill for everyone else, say, by a reduction in income tax). I'm also strongly in favour of road charging - I don't consider it fair that someone in the middle of wales should be clobbered for driving 10 miles to the local shops, just because millions of people chose to get stuck in jams in city centres rather than make use of alternatives.

Courant