Do you know how much your car cost?

Of course I do, you knucklehead, I hear you muttering under your breath. But before you jab your finger at the sales contract, let me stop you: that number in the lower right hand corner is not the correct answer.

As a car enthusiast since junior high school—with an oeuvre of study hall sketches to prove it—who has owned forty-plus cars (I lost count), I’m sometimes asked by friends for guidance on car buying. This has happened often enough for me to observe repeating notions about the car-buying process. For many, a big chunk of the process has to do with emotion, expertly pandered to by the car makers. I offer no advice there. But it has to be paid for, and that’s where the rubber meets the road, as it were.

Ink meeting the sales contract is more to the (ball)point, and here is where the wheels often come off, as you travel the road to acquisition (to flog the metaphor).

But let’s say that road was successfully navigated, and you arm-twisted the dealer to get what you consider a great deal. That’s what the car costs, right? Actually, no. Consider this: Why are you buying the car, anyway? The answer: You’re buying it for transportation. There are peripheral, soft-dollar benefits a specific car conveys to the buyer, such as status or pleasure, but only you know the value you choose assign to such things. What we are addressing here is the hard-dollar side.

This conversation doesn’t include such people as collectors, who buy cars for other reasons. If you bought your car to decorate your driveway, that’s one thing, but for the rest of us, cars are used to go places. And going to these places adds up to a national average of ~13,500 miles per year for each of us, according to the U.S. Department of Transportation.

If the car (or anything else) you buy, lease, rent, or steal is used for transportation, then the metric is simple. What you are paying for is… drum roll… cost per mile. Period. That’s it.

So… how is cost-per-mile calculated? Easy. Add every direct cost you paid out: acquisition, insurance, fuel, maintenance, repairs—everything. Subtract from this total the amount you received upon selling (or trading) it. Divide into this result the total number of miles driven. Voila! That’s what your car cost you.

In case you’re wondering, this figure, for most cars driven by most people, is in a range of $0.25 to $0.75 per mile. A question I hear you asking: What good does it do me to know cost per mile if I can only figure it in hindsight? Well, for one thing, knowing the true cost of anything as expensive as a car, which is the second most expensive thing most people ever buy, is always useful data for whatever purposes you choose to put it.

On the know-it-before-you-buy-it side, sources such as edmunds.com can help. Edmunds is an excellent source of this kind of information. Edmunds doesn’t pay me to endorse them—they don’t even know who I am—but as one who studies car sites at practically the Talmudic level, I have found them to be authoritative.

By the way, other questions people often have about car buying, e.g., lease or buy, new or used, have to do with cash flow, not the true cost of the car. This will always be how much you paid minus how much you sold it for divided by how far you drove it.

That’s the real number in the lower right-hand corner.

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