Thanks to Elizabeth Alexis of CARRD for finding and giving me a link to the AAA’s methodology for computing driving costs, used in APTA’s flawed study about the high household savings coming from switching from driving to transit. The AAA methodology indeed assumes perfect rather than realistic maintenance and tire changing, and has elevated depreciation and warranty charges.
The full list of problems with the AAA methodology, according to Elizabeth:
You are spot on about the misuse of data. The AAA study is really misleading It represents the costs for someone who buys a new car from the dealer with the extended warranty, overinsures it, drives it for 5 years, buys a new set of tires and then trades it in to the dealer, getting totally ripped in the process. If everyone did this, the average car fleet would be 2 1/2 years old (instead of 9). The only thing this study tells you is that you should never buy a new car and that you are an idiot to do anything but buy used cars off craigslist.
They are also assuming:
1) You buy a new car every five years.
2) Even though you know you will sell the car, you buy the extended warranty.
3) You accept the dealer’s trade-in price (which is very low generally).
4) Even though you know you are going to sell it to the dealer for no money, you go ahead and put on a new set of tires right before doing so.
5) You buy insurance with really low deductibles.
6) Because on average you have a 2.5 year old car, your annual car tax and your insurance are very high (in most states, the taxes are based on the value of the car).
7) And you finance the car @ non-deductible 6% interest. It should be noted that most car loans are 3-5 years. So if you kept a car after it was paid off… this cost would go away.
A better study for the costs of driving was done by Steven Polzin, of the National Center for Transit Research, who also serves on “several APTA committees.” Using various government survey data, he finds an average saving of $3,600 from giving up a car; this is less than the cost of an average car, since households might give up the lesser used car or take more transit or drive the remaining car more. I encourage everyone to bookmark the study and refer to page 18 for comparative spending on transportation in the US versus the EU-15; it’s a difference of 19.5% of household budget versus about 14%. Any figures for world public transit leaders Japan and Switzerland will be appreciated.