By the time the costs of gas, insurance, tolls, parking, and car payments are added up, the average American family spends more on driving than on health insurance or taxes. And for the bulk of society—those who use cars every day to commute, drop the kids off at school, and run errands—it seems impossible to trim the high costs of transportation in any substantial way.
Generally speaking, consumers scale back on purchasing products and services as they get more expensive. What we’ve seen over the past few years, however, indicates that people need gasoline so badly, and driving is incorporated so deeply into every part of modern-day American life, that demand remains quite high even when gas prices spike. When gas prices hit $4 in 2008, demand dropped by just 3%.
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One part of the problem can be traced back to the real estate bubble. As housing prices soared, more workers were forced to move further and further away from the workplace. Gas prices remained subdued, and at some point over the past decade or so, living in the distant exurbs and commuting 90 minutes each way to work became fairly commonplace.
Even though gas prices have receded from the $4-per-gallon summer, they remain high. The study estimates that a family earning $50,000 to $60,000 per year pays around $10,000 annually in automobile costs—including gas, insurance, and other related expenses. According to the Department of Commerce, that family is paying more for transportation than health insurance or taxes.
Because many people separate the various costs related to driving—gas, insurance, oil changes, the vehicle itself—they don’t see how much transportation truly costs as a whole. But the study makes it clear that that’s how driving should be viewed:
We usually treat gasoline as a separate purchase from the car, but it’s helpful to view the cost as a package. Outside of cities with convenient transit systems and pockets where walking and biking are feasible, owning, maintaining, and fueling a car is the price of the “ticket” we pay to work and move around the economy.
There are ways to cut transportation costs, of course. But for many drivers, none of the solutions are easy, and some have basically been impossible over the past few years. The result is that many Americans feel stuck with no option other than to keep paying. But here are a few of the ways you could trim transportation expenses, followed by why each comes up short as a solution for many drivers.
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You could move closer to work. But, given the housing market, you’d probably have to sell your current home at a loss—perhaps a huge loss. Chances are, you’d also wind up paying more for housing in your new digs, potentially negating any money saved with a shorter commute.
You could find a job closer to where you live. But that’s way easier said than done. Given that there are currently at least 14 million jobless Americans actively seeking work, most people who have jobs right now consider themselves lucky—and even if they could find work elsewhere, they’re understandably hesitant to switch employers in this uncertain financial climate.
You could replace your current commuter car with a more fuel-efficient one. But, most workers who have a long commute already drive cars that get decent mileage. As things stand, driving an electric vehicle isn’t feasible for drivers with especially long commutes, and few drivers are ready to drop big bucks on the plug-in hybrids like the Chevy Volt. Also, workers who are living paycheck to paycheck are likely to find it impossible to make any upgrade in terms of the car they’re driving. As the study states, “households making less money obviously have a harder time changing cars or jobs for a cheaper commute.”
You could utilize public transportation. But most metropolitan areas in the U.S. have poor transit systems, meaning an already long commute would become longer.
By some indication, Americans have slowly been making changes in how—or rather what—they drive in order to cut driving costs. Vehicles with big engines and poor mpg ratings are increasingly being replaced by 4-cylinder models.
However, the study indicates that, for the most part, Americans have adjusted to higher gas prices not by making dramatic changes to how or what they drive, but by scaling back spending in other ways—such as less eating out at restaurants, cheaper vacations and fewer shopping excursions.