I was reading an article the other day, how the proposed California bullet train would be a bargain in travel. The price to go 438 miles would be $86 or around 20 cents a mile. Other cheap trains are usually around 25 cents a mile, but a mid-range one can be 50 cents a mile (Amtrak's Acela is a good example).
I don't take a train to many places, but this got me thinking, "How much does a car cost per mile?" The IRS makes it clear that you can deduct 57.5 cents per mile for business use. That's a rough starting point, but we know that car prices and gas mileage varies widely.
What I really want to know is what is the cheapest car to own. Pretend I wanted to be as frugal as possible and didn't care about anything else, what should I get? The easy answer is some used piece of junk that will hopefully last a couple of years from someone who just wants to get rid of it. I had an old school teacher who would do that. He'd never get an oil change, because it simply wasn't worth it. I'm not going to take the easy answer, because finding a used car cheap and reliable is going to depend on the gems in your local area.
I really like the cost-per-mile metric as it gives you a way to compare to the bullet train and other forms of transportation. I did some searching on the web and of course one of my favorite personal finance gurus Clark Howard has it covered. He points out research in 2014 from Consumer Reports that says the Toyota Prius and the Honda Fit were the cheapest cars at around 40 cents a mile. The most expensive was a Ford F-250 which was a $1.16 per mile to run.
Think about driving 15,000 miles in each. Would you rather pay $6,000 a year for your car or $17,400? Obviously they are completely different cars, but unless you have a lot of truck-stuff to do, you can give yourself the equivalent of a before tax raise of $15,000 by going with the cheaper option. That's not only serious cash, but it is "fund your early retirement" kind of cash.
If you drive a lot, there's some great math on Green Car Reports. They take the cheapest cars with very, very good gas mileage and create a "Cost per MPG" to give you something would certainly be extremely frugal. The winner was the 2015 Mitsubishi Mirage CVT which costs $14,805 and gives you 40 MPG. I worked up a little spreadsheet on that and it will cost you around 27 cents a mile for the car and gas... assuming you drive 15,000 a year. That's using a 5-year average. If you hold on to it for 10 years it gets down to 17 cents a mile. None of this includes insurance, but that would presumably be cheap on such a cheap car.
Car and Driver has a nice list of cheapest cars to own as well. Their top bargain is the Nissan Versa 1.6 Base which costs around $10,000 and gets 29 MPG. Using the same assumptions as I did with the Mitsubishi Mirage above, the Nissan would be around 24 cents per mile. The initial low cost saves you more than you'd save on gas unless you drive more than the 15000 miles a year.
There really should be an easy calculator that allows you to enter your driving habits and gas prices in your area to give you some kind of real cost of operation. I have to believe it exists on the internet, but I couldn't find it. In any case, that bullet train looks like a pretty good deal, but a car becomes the better option if you have multiple people to transport.
6 Responses to “Cheapest Cars to Own”
Next: Buyer’s Remorse: Did I Buy The Wrong Computer?