(first posted 10/28/2015, updated 10/26/2021) At CC, we love to talk about the good old days, but as we all know, cars may generate less emotions today, but they sure are better in every objective parameter by a huge margin. And contrary to what might be sometimes assumed, it’s a lot cheaper to own and operate a car today; 25% less than in 1968, actually.
Two studies evaluating the cost of driving various classes of American cars in 1968 yielded an average of 11.4 cents, for an annual distance of 15,000 miles (the annual average then was 12,000). Since cost per mile decreases with increased annual mileage, the typical American in 1968 was paying more than that per mile. The studies also showed that the cheapest American cars to drive were pony cars, like the Mustang, undoubtedly because of their lower depreciation.
Gasoline averaged $0.34 per gallon, which is about $2.30 adjusted. The dropping price of gas in 2015 is a factor in the dip in ownership/operating costs as calculated by the AAA. Their April 2015 analysis showed that the annual cost to own and operate an “average sedan” (Camry class, presumably) is $8,698, or 58 cents per mile, also for 15,000 annual miles. That’s a 2% drop from the previous year, thanks to lower finance and fuel costs. The cost per mile for other classes of cars is: small sedan – $0.449; medium sedan – $0.581; large sedan – $0.710; minivan – $0.621; SUV 4WD: $0.708.
Of course, one can do better than that nowadays, mainly by keeping a car longer. We kept our 2000 Forester for 15 years, and our total cost of ownership was a mere 24 cents. That would have not been readily possible in 1968, as cars generally would not have lasted in full-time use for 15 years without major repairs.
Of course, lower costs are attainable by buying a reliable older used car. I know folks who’ve bought 20 year old Corollas and run them for years with very little cost. In 1968, very few would have considered buying a 1948 car as a regular transportation device. Although even then, I remember one or two folks who picked up old Plymouths and Dodges from that era and drove them regularly. Folks who can do their own mechanical work can always beat the average costs, if they’re so inclined.
Update 10/25/2021: Here’s AAA’s projected car ownership costs for 2021. It’s changed a bit, due to adding new vehicle categories, but the cost of driving a Medium Sedan (Camry, for example) is projected at $0.62.44/mile, which is actually a bit more than 25% cheaper than 1968. But then fuel costs have risen since this report was written in the spring of 2021. And car prices (average transaction price) have been rising. But on balance, costs to drive an average vehicle for 15k miles per year are still some 25% lower than they were in 1968.