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  • Writer's pictureRahul Kumar

What COVID-19 Has Revealed About the Costs of Car Ownership

Recently, U.C. Davis’ Road Ecology Center published a study indicating a drop in traffic and accidents during California’s shutdown. The results are not surprising; stay at home orders usually mean people, well, staying at home. Staying at home means less driving, which means less accidents.

In April 2020, California roads and highways averaged only 500 accidents per day, vs 1,000 in 2019. Accidents resulting in a fatality were also cut in half, down to an average of 200 per day[1]. Thus, accidents have been cut in half since Governor Newsom’s order went into effect.

Less drivers on the roads have resulted in saving the public about $40 million per day, or over $1 billion and counting since the shelter-in-place orders. Traffic volumes are down 55% from their peak earlier this year, and 32% overall.

This study got me thinking. While no one wants a global pandemic, could we possibly see some glimmers of hope about our obsession with the automobile and its impact on our lives?

Getting the keys to your own car is a rite of passage. It’s also one of the highest costs American households face. 95% of American households own at least one vehicle, and 85% of people (whether they own a vehicle or not) depend on cars to commute to work. For the average 2-person household in the U.S., the cost of transportation amounts to $19,344 annually. Americans literally need a car to get to work, and their jobs to afford their cars. It’s a transportation paradox.

History of Car Ownership Throughout the U.S. Car ownership was not always as common as it is now. There was a time when owning a vehicle was rare and only for the wealthy, inaccessible to a large part of the population. Though the technology that led to the invention of the automobile saw its beginning in the 19th century, it wasn’t until the 20th century that the idea of owning a vehicle began to spread. It took Henry Ford to make this innovation accessible to the masses. He took advantage of the still-new concept of assembly line manufacturing to create his automobiles. In 1914 he sold the first-ever Model T for $490, and by 1920, there were more than 8 million registered Ford vehicles on the road. That year, car ownership in the U.S. exploded, and over the entire decade of the ’20s, the number of registered drivers grew to 23 million, or roughly 1 in every 5 Americans.

Each year, an average of 17 million passenger vehicles are sold. The price of the average car continues to rise, yet people continue buying them. Since 2000, the number of registered vehicles in the US has increased by 26% while the average price has increased 77%. Today, there are 1.4 cars for every American 18 and older.

The Social and Global Costs of Owning a Car But, as we started, the total cost of car ownership isn’t just borne by the buyer. There are social and societal costs resulting from our obsession with the automobile. When you buy a car, you’re not the only one paying for it. Businesses must build parking spaces to accommodate your car as most Americans’ cars sit parked about 95% of the time. The cost of constructing parking spaces can range anywhere from $5,000 to $10,000 to build. That number only reflects flat, open parking lots, however. Parking structures, on the other hand, can cost a minimum of $25,000 up to a high estimate of $50,000 per space. Cities are also responsible for constructing the roads you drive on, and these costs continue to rise each year. In 2007, $146 billion was spent on highway maintenance (building, operation, and maintenance). Fast forward to 2017, this number increased to approximately $181 billion, which equates to about 6% of total state and local general expenditures. What’s more is that the Federal Highway Fund is maintained primarily by an 18.4 cent per gallon tax. As fuel economy has gotten better, people are buying less gas, and the fund was not pegged to inflation which means that the costs have outgrown the revenue. The number of miles people are driving is also increasing at a lower amount year over year, so the fund is at risk of insolvency.

When it comes to collisions — which happen constantly — the city and state must take on the costs of those damages as well. In the context of the entire country (as of 2010), economists broke down the costs of automobile crashesinto the following elements:

These factors, in particular, amounted to about $242 billion during that year, while the total officially attributed to “societal harm from motor vehicle crashes” was an estimated $836 billion.

The larger, and more difficult expense to quantify is that of climate impact. The transportation sector, accounted for 28% of all U.S. greenhouse gas emissionseach year. The Environmental Protection Agency (EPA) estimated that these emissions have increased by 3.1% in the last 3 years, contributing to the air pollution that kills an unimaginable 4.6 million people every year. A studyconducted in Europe found the average climate impact of car ownership to be 285–373 billion Euros per year.

When it comes to car ownership we think, as an individual consumer: “What can I afford?” I think the better question is “what can WE afford?”. If owning a car costs the average American adult $11,000 per year and costs our communities and our planet over $1 trillion and upwards of 40,000 deaths per year from accidents alone (plus many more from climate-related illnesses), shouldn’t we rethink the equation?

When our economies and our cities do come back, let’s think about investing in proper, mass transit, one that can alleviate the burdens on our pockets, and save lives at the same time.

[1]Data from the real-time California Highway Incident Processing System (CHIPS)

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