6 Crushing Expenses of Commuting (and how to minimize them)

In talking with my coworkers, I would come across individuals that would opt for a brand new house. In my city, it has been most fully developed. There isn’t anywhere to place a subdivision. Additionally, the land is more expensive closer to the city so these individuals would be able to afford a new house with an expensive lot expense.

Once individuals go down this road, it typically means a 45-mile one-way commute that takes 1 hour (but that could be 1.5 hours if the traffic is bad). Typically these individuals have made up their mind and that is the lifestyle they are running with, regardless of any logic. If you want a brand new vinyl sided McMansion, then you’ll have to pay dearly.

I personally think this is crazy when individuals make this decision. They are not considering all of the expenses in commuting.


Every mile put on your car causes the value of the vehicle to depreciate. This cost can vary greatly.

Personally, my car has 210,000 miles on it and I paid $18,300 for the vehicle brand new. I estimate the value is worth around $2,000 today. So the depreciation expense over the history of the car been (18,300 – 2,000) / 210,000 miles = 7.7 cents a mile. Assuming the useful life of the car is 310,000 miles, then those additional 100,000 miles would cost me around 2 cents per mile ($2,000 / 100,000 miles).

For your typical suburbanite, the costs are much much higher. Since most people are driving much newer cars the depreciation curve is higher. A car loses around 20% of its value in the first year. Every mile they drive costs many times more. Assuming a new car worth $35,000, the first-year cost would be $7,000. A typical individual drives a car around 12,500 miles per year, so that works out to around 58.3 cents per mile in depreciation expense.

For this example, let us say the average commuter is paying 30 cents a mile in depreciation or a total of $3,750.


Fuel is typically one of the more obvious expenses. We stop frequently at the gas station so it is more obvious. Assuming a car gets 25 miles per gallon, a 90-mile roundtrip commute should take around 3.6 gallons per trip. I think MPG is a pretty good estimate since most people do not drive particularly efficient.

Even at today’s cheap gasoline prices of around $2.50 a gallon, that should cost $9.00 per day. Every 3.5 days, that car will need to be refilled taking approximately 10 minutes of time. $9.00 * 260 trips per year is $2,340 per year.

Wear and Tear

Every mile you drive wears out the car. Brake pads and rotors need to be replaced, tires rotated and\or replaced, alternators wear out, and oil needs to be changed.

According to the Bureau of Transportation Statistics, the maintenance and tire costs are around 10 cents per mile. Of course, if one were to repair their car themselves they could greatly lower their costs to materials only. I would estimate my cost is around 3 cents per mile. At 10 cents per mile, the costs would be around $2,340 per year.


Insurance costs for newer cars can really add up if you have full coverage insurance for a car you can’t afford. According to Bankrate, full coverage insurance will cost you around $1,502 per year. My collision only car insurance is around $400 per year, so that is around 3.75 times more expensive.


Taxes are a major expense that will vary greatly. Sales tax for a new car will likely be in the 10% range. The car will need registration that will cost around $200 on average. Some states even charge a property tax based on the value of a car that can cost $1,000 per year.

Financing expense

Assuming someone has a $38,000 loan balance ($35,000 car plus sales taxes) and a 4% auto loan, their annual expense will be $1,520. For someone like myself with a paid-off car, it will cost me $0 in interest.


Time is money. If someone is spending 2 hours a day commuting 260 days per year, that is 520 hours that could be spent more productively. An individual should value their free at an hourly rate. For a typical American, that might be around $25 an hour. One could argue it should be higher since sitting in traffic during a commute is stressful. Putting it together, that would cost 520 hours per year * $25 = $13,000 per year. I will add another $300 considering an individual will need to stop at a gas station 74 times per year, so $13,300 total.

Putting it all together

$13,000Value of Time
$24,450Total Cost

Overall, these types of commutes are an absurd proposition. One would be much better off to buy a home closer to the city that costs more. People greatly impact the financial impact of commuting. Regardless of your commuting situation, there are many practical ways to minimize these expenses.

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