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Economic Benefits

Lifestyle Assessment Scenario Manifesto Vision Benefits The Law Risk Environment

To most of us, automobiles represent a cheap, fast way to get where we're going. Many auto expenses, however, are hidden. When included, they make the true costs of driving much higher than we realize. The "True Costs" worksheet below will help you determine how much you're spending on your car each year. Those are direct costs. Indirectly, through many types of taxes, we also pay for the land, roads, "free"ways, bridges, and tunnels. Through government, we also pay to provide cleaning, landscaping, irrigation, signs, signals, reflectors, and police and emergency services. According to the American Automobile Association, a new car costs $6,720 a year to operate.

Electric bicycles, for errands and short commutes, offer an alternative to the high costs of driving. Obviously, maintenance & fueling costs are minimal. So every mile you ride an electric bike instead of driving saves you money. Fuel, for example, costs about 0.2 per mile. You may also be able to save on bridge tolls, parking lot fees, and tickets. Here are the numbers:

  • The charger plugs into standard 110 VAC electrical socket and charges in three hours or less. Charger output is 6 amps.
  • Charging for 3 hours produces 18 amp-hours, more than enough to fully charge a 17 amp-hour battery, and costs about 5 cents.
  • Charger uses 1.3 amps at 120VAC or 156 watts.
  • Three hours of charging uses 468 watt-hours or 0.468 Kwh.
  • At a cost of $0.11/Kwh, that's about 5 per charge or 0.3 per mile.

Some people, however, can realize much larger savings. For example, a household with several cars might work out a way to live with one less car. That would free up insurance, registration, and smog check costs. Another family may find that their car qualifies for a reduced insurance rate because it is used less or in a certain way. See the "Insurance Questions" in the next section.

Electric bicycles are extraordinarily thrifty transit when one doesn't need a car. The reason is that, under California law, an electric bike is legally a "bicycle" [CVC 406(b)]. That means you don't need a driver's license, vehicle registration, or insurance. (By contrast, a moped requires all those costs). In fact, if you don't have a driver's license, an electric bike may be your best option. (Legal background)

In addition to the personal benefits you'll receive, society at large also realizes economic benefits. Increased EV use means cleaner air which reduces the incidence of respiratory diseases and their associated health care costs. Widespread use could also reduce pressure for more roads and road maintenance.

If you've decided to invest in this new technology, see products and services for what's available in electric bikes.

Insurance Questions

Automobile insurance companies offer various discounts depending on how far, and for what purposes, you drive. Although not all insurance companies offer similar discounts, yours may if you answer "YES" to any of the following questions:

  • Do you commute to work by means other than your car?
  • Do you drive your car less than 12,000 miles per year?
  • Do you drive your car less than 6,000 miles per year?
  • Did you reduce the number of cars in your household?

Contact your agent to see if you qualify for an insurance rate discount.

Cost of Owning/Operating a Car

Ownership Costs
Insurance +
License & Registration +
Depreciation +
Finance Charge +
Subtotal Ownership =
Operating Costs
Add up these costs for a typical year of driving or if it's easier, add them for a month and multiply by 12.
Gas & Oil +
Tickets +
Tolls & Parking +
Maintenance tuneups, repairs, tires +
Other: car wash, accessories, etc. +
Subtotal Operation =
Subtotal Ownership +
Total Costs =

Examples of total car ownership and operating costs per year: (Source: American Automobile Association)

Miles per year 10,000 20,000
1994 Ford Escort $3,980 $6,240
1994 Ford Taurus L $4,660 $7,140
1994 Chevrolet Caprice $5,840 $7,860

...Now consider the damage your car does to our health and the environment. That's costly!

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