Car commuting: a bad proposition – part 2

mass transit interior
catch up on your blog reading instead of sitting in traffic

Part 2: The Fair-weather Commuter

Riding in cars can be really fun and convenient, especially on a sunny 70-degree day with the windows down and the music loud, but you will pay dearly for that privilege.  In part 1 of the car commuting series, I looked at the ROI of getting rid of your car based on various assumptions.  The most extreme scenario, which consisted of riding your bike instead of driving and accruing some life-extending benefits along the way was worth $260,000 over 10 years.  This is over 5 years of work for the typical American!  We are talking 50+% of your career here just by riding a bike instead of owning and commuting in a car!

But even with these jaw-dropping numbers, not everyone will want to nor be able to get rid of their car completely.  Maybe the weather is ridiculously bad or you just can’t give up the kicks of taking shortcuts through the really hoity-toity neighborhoods playing vaguely menacing music on your way home from work… who am I to judge?!  I am not here to judge, but simply to inform and spread the FI love.  So in this post, part 2 of the car commuting series, the expected finale in the series for the time being, I looked at the same three scenarios but assumed that you would keep your car and just use it half as often.  That is a pretty generous assumption, but the numbers are still very impressive and show that alternative forms of transportation are still big money savers even if you can’t utilize them all the time.  For example, splitting your commute time between biking and car commuting is worth about $115,000 or 2+ years of work every 10 years for the average American household…

As a quick introduction, the three scenarios are:

  1. Public transit and car commuting 50/50 split
  2. Bike commuting and car commuting 50/50 split (no exercise benefit dollars)
  3. Bike commuting and car commuting 50/50 split (with exercise benefit dollars)

Scenario 1: Keep your car, but use public transit 50% of the time

  • 10-Year NPV: $8,328
  • 10-Year ROI: 20%
  • 10-Year Payback: 0.9 years

Scenario 2: Keep your car, but bike 50% of the time (no exercise benefits)

  • 10-Year NPV: $28,881
  • 10-Year ROI: 126%
  • 10-Year Payback: 0.6 years

Scenario 3: Keep your car, but bike 50% of the time (with exercise benefits)

  • 10-Year NPV: $116,241
  • 10-Year ROI: 509%
  • 10-Year Payback: 0.2 years


Taking the conservative approach and not including the life-extending value of exercise, 10 years of commuting 50% by mass transit is worth about $8,000+ while doing the same thing but with a bike is worth $28,000+.

So we are talking about saving the average household about 2/3 of a year of work every 10 years by riding bikes 50% of the time.  If you really want to get crazy and include exercise benefits, the value jumps to $115,000+ over 10 years for the bike example… whoa!

Here is how the numbers work.  This analysis takes into account the fact that biking and public transit generally take a lot longer than car commuting.  The reason biking is worth more, however, is because I assumed your time spent on a bike was not as expensive as time spent on a bus because you are getting some exercise done at the same time.  The main savings on the first two scenarios come simply from using your car less.  At 40 cents per mile, cutting car use by 50% is worth about $30,000 dollars in and of itself, no other factors considered.

The last thing I want to point out about all these scenarios is that they all pay for themselves within a year!  This makes the risk of not succeding with an alternative commute plan less important because it won’t cost you that much anyway, even if you fail.  All you need to do is simply pick up a bike or a bus pass and start saving money within a year, even if you still use your car 50% of the time!  Get it Jelani!


I won’t get too bogged down into the technical details because I will just be repeating myself from part 1. However feel free to modify my assumptions to your own liking by downloading and modifying the spreadsheet (just change cash-flow white cells).

  1. Public transit monthly pass = $150 (Portland and NYC, overestimated for cushion)
  2. Public transit time costs = $7 per hour (vs. $10) due to multi-tasking
  3. Average car commute = 16 miles or 24 minutes (2009 U.S. census)
  4. Average public transit commute = 48 minutes (2009 U.S. census)
  5. Average bike commute = 72 minutes for 16 miles or 4.5 minute mile (estimate)
  6. Estimated 4 days of “commuting” per week for public transit to account for errands and such (estimate)
  7. Estimated 3.5 days of “commuting” per week on a bike to account for errands and such (estimate)
  8. 7,500 miles driven per year at 40 cents per mile (AAA, EPA, NYTimes)
  9. New bike every 5 years at $250 (estimate)
  10. Bike maintenance every year at $50 (estimate)
  11. Bike time costs = $5 (vs. $10) due to exercise synergy (estimate)
  12. End of life time costs = $5 (vs. $10) due to excess supply of time (estimate)
  13. Exercise time adds 4x as many minutes to your life (PLOS Medicine)
  14. Savings grow at inflation adjusted rate of 4% per year


My very good friend (and serious cyclist) insisted that my bike cost estimates were a too low. He was thinking closer to at least $500 for a bike you can use every day and then closer to $200 for maintenance and upkeep every year.  I ran the numbers and it shaves about $3,400 off the value of using your bike half the time (no exercise benefits).

Also, I decided to drop my the savings estimate of cost per mile from 50 cents to 40 cents because some driving costs will be relatively fixed (insurance and, to a lesser extent, depreciation).  I probably still could have kept it at 50 cents because AAA actually says the true cost is 60 cents per mile, but I’m trying to be conservative here.

Working from home to save money

Car commuting: a bad proposition – part 1

Leave a Comment