Saturday, July 21, 2007
More on Cost of Driving
Did some more research on cost of driving cars today. The overall inflation rate from 1950 to today is almost exactly 10 times. A dime in 1950 buys what a dollar will buy today. Gas cost about 20¢ in 1950 in the Midwest. It now averages around $2.50. But in 1950 cars averaged about 11 miles per gallon vs over 20 today. So the real cost of gas per mile is $1.25 by comparison. We spend the same dollar amount per person on gas today as we did in 1950, but that's because we drive almost double the miles per person. With dramatic increases since 1950 in disposable income, the actual percent of disposable income used to buy gas has gone down, not up, even though we drive twice the miles.
The cost of the automobile itself is slightly up as a percent of disposable income, but this is largely due to the fact that we are buying more expensive cars with far more features. My loaded 1960 Fury did not have seat belts, airbags, a.m/f.m. stereo with cd player and 6 speakers, fuel injection, computerized engine analysis, or electric seats, door locks, and alarm system. It required far more maintenance (although you could do it yourself if you were so inclined.) Expected life 125,000 miles, maybe.
In telling this to one friend the other day, he said: "Why does it still hurt so much when the gas pump reads $50." Good question. I was only 2 in 1950, so I'm not sure whether a full tank at $5 gave my Dad a headache or not. I'm guessing it did. I do remember buying used cars for $250 in the late 60's and that was a lot of money to me.
Overall, I think we should quit our grousing. We have it so, so, so good.