OT - gas price example, etc.
(Gas Price Watch - around the corner, four stations have Regular at $1.28/gal. - Austin, TX.)
I kept one vehicle (89 GMC S-15 Jimmy) for eleven years and 216,700 miles. At an (estimated) average gas price of $1.00/gal and an average mileage of about 16 mpg, that's 13,544 gallons - or $13,500 spent on gas over the life of the truck.
Now, the accounting purists will tell you that's an installment cash flow, one tank at a time, so some discounting (net present value) ought to be applied. I'm not going to do that math, since my point is a general one - I had to keep the vehicle for *much* longer and *many* more miles than average in order for the lifetime fuel cost to approach the $16,000 I spent to buy it in the first place; with NPV, it's closer to half. Consider that most cars run less than 100,000 miles and are more fuel-efficient, yet cost more today. For most commuters, I don't think lifetime fuel costs exceed 20% of the vehicle cost. We're paying more to use less energy, often more than the cost of that energy difference.
This is also the reason the IRS wants your employer to prepay your taxes for you (withholding) rather than ask you to write a check each month ... you are FAR more aware of what you are spending when you must pay attention to it regularly and constantly. (Imagine if the pump gave a receipt like retail stores do ... calculating tax *after* the transaction? Would the 38.4 cents per gallon become more visible then? After all, without taxes, gas is LESS than 90c/gal here right now!)
- Mitch
PS - Last September, I replaced the Jimmy with a 2001 Silverado x-cab pickup. I expect to run the wheels off of it, too. |
