Calculating The True Cost Of A Society Based On Automobiles

Ever heard the expression, “Can’t see the forest for the trees?” It suggests that sometimes we get so caught up in the details of what is right in front of us that we can’t see the big picture. Prompted by an inquiry from Congressman Seth Moulton, researchers at the Harvard Kennedy School set out to determine just how much money the state of Massachusetts and its citizens spend each year to maintain a transportation system based on private car ownership.

The answer, according to the researchers, is a staggering $64.1 billion. “This is a huge number,” said the paper’s lead author, Stevie Olson. “It’s unexpected because the majority of drivers, citizens, consumers experience roads for free. You just drive out your parking lot, your driveway, and you’re on the road. No one’s charging you, but there’s all of these costs that are both public costs, indirect externalities that are also costs, and then private costs that people are incurring.”

More than half of that figure — $35.7 billion — comes from public funds, the report states. That comes out to around $14,000 for every household in the state. Households with private vehicles pay another $12,000 in direct costs, the researchers say.

Some of the costs borne by various state and local governments involve obvious things like road maintenance, snow removal, and policing. But they also include less obvious intangibles such as the effects of pollution, the value of land set aside for parking lots, lost productivity from sitting in traffic, and various costs associated with injuries and deaths on the road

Congressman Moulton has an agenda. He is an advocate for more public transportation, especially electrified trains. But the research is valuable in its own right as a way of informing people just how expensive a transportation systems based on private vehicle ownership really is. “If you think about it as an equation, [private vehicle ownership] is a variable that has not been in the conversation, and it’s something that should we be considering as we think about what is the best way to provide transportation options to the public,” says Linda Bilmes, a senior lecturer in public policy at the Kennedy School who oversaw the research.

“We’re not trying to say that cars are bad or that we don’t need roads. We’re just trying to say that if we think about the overall cost/benefit analyses around transportation when it comes to this conversation, not only is there a cost to the vehicle economy, but the cost is actually larger than we may have realized.”

Moulton says, “I asked for this study because we lead the country in bad traffic, and the best solution to that problem is building a reliable, regional, electrified rail system. But a lot of people point to the cost of a rail system as the excuse not to do it. They advocate for wider roads and other short-sighted fixes, but the truth is we pay massive amounts to subsidize car travel and don’t even know it. Professor Bilmes and her students finally put a price tag on driving.”

Stevie Olson adds, “While the $64 billion cost applies to Massachusetts, the costs of the vehicle economy are similar across states. The price tag for this infrastructure is big in every state, and you can imagine collectively as a nation that the total is huge. We can use the study to think about urban travel, such as in a metropolitan area, but we can also use it to start thinking about interstate travel. The study illuminates tradeoffs that we make when investing in transportation infrastructure, and, rather than think of roads as free, we need to realize that significant resources go into the operation of the motor vehicle economy.”

If you think the cost of vehicle ownership figures listed above are unrealistic, consider this. Every year, Kelley Blue Book announces its “5 Year Cost To Own” awards. For the past three years, the award for electric cars has gone to the Nissan LEAF. KBB says it costs $40,186 to own one for 5 years. The numbers for other popular electric cars are $42,417 for the Chevy Bolt and $44,910 for the Hyundai Kona Electric. (The Tesla Model 3 is omitted from KBB’s analysis for some unknown reason.)

You may quibble with how Kelley Blue Book comes up with its numbers — the amount of range available for each car and how the federal tax credit should affect the calculation, for instance — but nothing changes the fact that owning a car in the United States today has a direct cost to owners of over $8,000 a year.

That’s a ton of money but it’s something most people never think about because we don’t just get a bill every month for $666.00 for each car we own. The total is a composite of taxes, fuel, insurance, repairs, finance charges and other costs.  We tend to focus solely on the amount of our monthly car payment and ignore everything else. How many of us ever stop to ponder the cost of the environmental consequences we leave in our wake?

The point is not that public transportation is a better alternative. The point is that individually and collectively, we pay an enormous amount of money each year to support a lifestyle that is predicated on owning private cars. Perhaps it is time to stop and think about whether that model is sustainable. If nothing else, the results of this Harvard study can help inform that conversation.