The Annual Cost of Owning a Car is $8,776. What About Other Modes? A Back of the Envelope Calculation

From Hilary Reeves, Communications Manager


AAA released last week their report on the annual cost of owning a car, about $8776 for a sedan, $11,239 for a SUV. They calculated based on gas at $2.88 per gallon, so these costs are somewhat low given the current price of gas. The report includes a worksheet for calculating your own costs. The basic categories are:

  • Operating costs, including gas, maintenance, and tires
  • Ownership costs, including depreciation, insurance, taxes, licenses/registration, and finance charges
  • Other costs, including washing, accessories, etc.

I began thinking about how a person would calculate these buckets if they regularly used transit or got around by bicycling or walking. Based on the calculations below (which are based on personal experience not exhaustive research), the annual cost for each mode are:

  • Mid-sized sedan = $8,776 (AAA report)
  • Transit = $1,810
  • Bicycling = $680
  • Walking  = $250

Of course one key factor to using transit is being near bus lines or LRT stations. Metro Transit buses and trains have bike racks, so “nearby” is a little farther away. There also are options, especially in the Twin Cities, for car-sharing and bike sharing. HOURCAR car-sharing has monthly membership fees from $5-$15, plus trip fees. Nice Ride Minnesota annual subscriptions are $60 for unlimited ½ hour trips. And for a limited time this spring, Nice Ride subscriptions are on sale for $40.

AAA links:
News Release
Report (pdf)

Using the chart in the report from AAA, my estimates are as follows.

Transit:   Annual cost $1810 

  • Operating = $0 in terms of gas, maintenance, and tires. The local bus system does have these costs.
  • Ownership costs = $30/week or $1560 per year for a GoToCard, based on rush-hour fares and not counting the 10% discount.
  • Other costs: maybe better shoes for walking, rain coat, umbrella, occasional cab fare for missing the bus. Let’s say $250.

Bicycling:  Annual cost $680.

  • Operating   $190-$280

For bicycles, the annual maintenance, assuming you already have a bike, is an annual tune up, new tires, new bike lights or batteries each year. A local bike shop offers tune ups for $70-$160 (basic tune up to bike overhaul). Last year a set of commuter bike tires cost about $80. A new bike light is around $40.

  • Ownership:  $250

None of the categories on the AAA chart work for bikes. Some things particular to bikes might be a place to park it. Or perhaps, if you are a year-round rider, a second bike for the winter rides. The Sibley Bike Depot has refurbished bikes from $130-$350.

  • Other:  $150

For bikes, there are some accessory costs, especially a good helmet and visible clothing. For winter cyclists, gloves and a good hat. Figure $40-$60 for a good helmet. For jackets, there are a lot of opinions out there about what breathes and keeps you dry and warm. The options for dropping money are equally wide-ranging. Figure $70 and maybe that’s more than you need, much less than you might spend. Accessorizing you and your bicycle can be as expensive as you like. You’ll need some kind of messenger bag or panniers for your stuff. I got a perfectly useful over-the-shoulder bag at a campus bookstore for around $25.

Walking: Annual cost = $250

  • Operation—mostly your body, with clothes and shoes.
  • Ownership—ditto.
  • Accessories—well, wardrobe is limitless.

Costs attributable to getting around on foot:  good pair of shoes, umbrella, rain coat, hat, gloves.


  • The AAA report calculates a cost per mile. They estimate the cost per mile for a mid-sized sedan driven 10,000 miles in a year is 73.9 cents.
  • There is some data that the average length of a bicycle trip is 4 miles. If that’s twice a day for a year, the total is 2080 miles. With annual costs of $680, that’s 32 cents per mile. One regular commuter I know logs around 15,000 miles per year as a bike commuter. He may spend more, being a year-round guy, but using our figures his cost per mile would be 5 cents.
  • If we guess that a person walking (to transit or to nearby work) walks 1 mile each way, that’s 520 miles a year. With annual costs estimated at $250, that’s 48 cents per mile.