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ECONOMICS OF OWNING {these things}

[10 September 2006]

One of the "big advantages" of using alternate vehicles such as motorcycles is that they save money on fuel. With US fuel prices rising the way they have (tripling between 2001 and 2006) saving some money on fuel doesn't sound like such a bad idea.

The problem comes when you start doing the math, and it becomes obvious how difficult it is to save money this way. To save you any money, any alternate vehicle would have to get better fuel economy, and then you'd need to use it enough (and it would need to last long enough) to recoup the cost of buying it, and (hopefully) then some. Only after it has recovered its own costs does it begin to actually "save" you any money.

The easiest way to arrive at these figures is to figure out how much fuel costs per-mile are for each different vehicle and what each vehicle costs, and then to compare the amounts of miles needed for each to recover its purchase price. For this example we shall assume that one already owns a car and that getting rid of the car isn't an attractive or possible option. We will also assume that the price of fuel remains stable over time.

There is also the problem of maintenance and repairs, some of which can be planned on and some of which can't--but for this example we will disregard all these costs. There is also an argument of what each of these "alternate" vehicles costs to buy, even simply comparing a new example to an equivalent used one. The problem with used vehicles though is that they are more likely to need repairs, so we will only use new prices.

For this demonstration, it doesn't matter what type of alternate vehicle is being considered--the only things that matter are its cost and its fuel efficiency. For the vehicle costs and fuel efficiencies below, I have drawn from examples of what the vehicles under consideration cost and the fuel efficiencies they typically obtain.

As a standard of reference, first I will use my own SUV that only gets about 18 m.p.g., and that fuel costs $2.75 a gallon (current price as of this writing). Such a vehicle would cost 15.2 cents per mile to fuel. In column #4 is the cost-recovery mileage for comparision against an 18 m.p.g. vehicle.

I very much like my SUV but it doesn't get very good fuel mileage. The problem though with having a car that gets better mileage is that the economics of saving money by buying one of these alternate vehicles gets even worse. Let's run the same example, but this time for a car that gets 30 M.P.G., and use the same fuel cost ($2.75 a gallon). This car would then cost about 9.16 cents per mile to fuel. In column #5 is the cost-recovery mileage for comparision against a 30 m.p.g. vehicle.

11 2 3 4 5
Vehicle Cost Fuel efficiency, est. (mpg) Cost per mile, cents Recoup Mileage: 18 mpg vehicle Recoup Mileage: 30 mpg vehicle
$3000 35 (motorcycle low) 7.86 40,427 229,090
$3000 60 (motorcycle high) 4.59 28,051 65,454
$2000 50 (scooter low) 5.5 20,454 54,545
$2000 80 (scooter high) 3.44 16,891 34,909
$1000 100 (moped low) 2.75 7,982 15,584
$1000 150 (moped high) 1.83 7,438 13,636
$500 175 (motor-bicycle, low) 1.57 3,647 6,583
$500 225 (motor-bicycle, high) 1.22 3,557 6,293

What's obvious here is that if you want a small form of alternate transportation and your intention is to save money by using it, then your priorities should be to buy something that is as inexpensive as possible and also that gets the highest fuel-efficiency you can. ....What's also obvious is that many of the people who buy "alternates" to save on fuel costs probably don't drive them far enough to ever recover the purchase price, and aren't really saving money at all.

....I asked about this issue online--that of cost-savings for operating these vehicles. It's a common assumption that if you use one of these types of vehicles instead of a car, that you must be saving money--but most people who owned them weren't primarily concerned with saving money. Most owners' groups that I found online for motorcycles, scooters or mopeds were primarily enthusiasts or collectors/restorers, who only rode their vehicles as a practical matter. Most users of motorized bicycles were tinkerers and recreational riders who did not depend on them for daily transportation, or go to much of any lengths to detirmine their true operating costs. Most users of motorized bicycles were also using electric systems, which offset part of their costs (recharging) onto the owners' electrical utility bill.

Very few people claimed to save money overall by simple fuel costs. By far the main factor in the economic advantage was for people who worked in urban areas and who could park a motorcycle, scooter, moped or motorized bicycle for free--while taking their a car would mean having to pay for a parking spot during the day.

One unique aspect of motorized bicycles was that a very-small number of people who rode them in urban conditions noted that their commute times on them were slow, but consistent regardless of auto traffic conditions. They could usually bypass bumper-to-bumper traffic, either by riding on roadway shoulders, taking alternate routes not available to car traffic, and so on.

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