How Much is Your Driving Costing You?

On my way home last week I was not just thinking about advice for newlyweds. I was thinking about what I was doing - driving of course! It made me think of how much it was costing to me to drive based on my speed. You may or may not know that driving faster will cost you more money. The details are explained well in this Yahoo! Finance article.

Since I already knew that driving faster costs me more money, that was not stopping me from going 70 mph (the speed limit was 65 most of the way). What I was wondering is how much it costs me in relation to time. Essentially, am I better off driving faster and getting there sooner, or would I save more by driving slower? It really all boils down to how much you value your time on an hourly basis. But first, lets talk about the cost of driving aspect.

According to the Yahoo! article, if you drive 10 miles per hour faster, you will arrive at your destination 50 minutes sooner (assuming you are making a 400 mile trip). So for every 10 mph your speed increases, your travel time decreases by 50 minutes. That sounds pretty good to me! But here is where the cost comes in. You spend an additional 54 cents a gallon for every 10 mph increase.

Technically of course you do not actually spend more money on the gas. You paid a set price for it when you filled up. The additonal cost is due to the fact that your miles per gallon (MPG) decreases when you go faster. So if you were getting 35 MPG at one speed, increasing it by 10 miles per hour is the equivalent of paying an additional 54 cents per galloon when going your original speed. Now we will look at the time factor.

Let's assume you value your time at $25 an hour. If that is the case, saving 50 minutes on your 400 drive, when you could be working, would be worth $20.83. If you normally drive 65 mph and get 35 MPG, assuming a price of $2.75 per gallon, your cost per gallon would increase to $3.29 per gallon when driving at 75 mph. Assuming you were making a 400 mile drive, $3.29 per gallon at 35 MPG would cost you a total of $37.60. At the lower cost of $2.75 per gallon and at 35 MPG it would only cost you $31.43. That's a difference of only $6.17 which means you would be netting $14.66 because of the extra time you saved.

Whew, ok. Sorry to throw around so many numbers. Moral of the story is, yeah you will save some money. Is it significant? Well I guess that depends. If your time is only worth $10 than yeah I would say you probably should drive a bit slower. However, if you consider your time worth $50 an hour or more, go ahead and drive a little faster.