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Methodology

Various vehicle cost estimates are available for use in economic analysis (Barns and Langworthy, 2004; Litman 2009; TRISP 2005). These should be updated to reflect changes in costs and and operating efficiencies that occur over time. Vehicle costs values are available from  business management consultants such as Runzheimer International (www.runzheimer.com), and automobile clubs, but those estimates are based on newish vehicles (typically the first four or six years of a vehicle's operating life) to reflect the types of vehicles used by businesses and club members, and so tend to exaggerate financing, depreciation and insurance costs compared with actual vehicle fleet averages.

Calculating project benefits and costs can be as simple as using an average cost-per-mile value for all affected travel, or as complicated as applying a model that calculates various types of costs for various vehicle types to each road segment. Separate analysis is needed for projects that affect vehicle ownership and therefore vehicle ownership costs.

Vehicle Cost Categories

Vehicle Costs include direct user expenses to own and use private vehicles. These indicate the savings that result from reduced vehicle ownership and use. These can be divided into fixed (also called ownership or time-based, which are unaffected by the amount a vehicle is driven) and variable (also called operating, marginal or incremental, which increase with vehicle mileage). Some costs generally categorized as fixed, such as depreciation and insurance, actually increase with vehicle mileage. For example, increased annual vehicle mileage tends to increase the frequency of vehicle maintenance and repairs, and reduces resale values. Private cars are usually depreciated over a 10 year period, trucks and buses over 20 years.

        Fixed Costs 
    • Purchase and financing
    • Insurance
    • Registration fees
    • Scheduled maintenance
    • Residential parking
        Variable Costs 
    • Fuel and oil
    • Tire wear
    • Repairs

Fuel-Related Costs

The relationship between fuel consumption rates and speed is the most widely understood of the operating cost factors. The Cal-B/C model uses the following fuel consumption rates (see table below), obtained from the California Air Resources Board's Motor Vehicle Emission Inventory (MVEI) models, and consumption-by-speed relationships modeled in HEEM. However, these efficiency curves tend to change over time due to technological change, so it is important to obtain the latest available data.

Fuel Consumption Rates (gallons/mile)

 Speed
(mph)
Auto
Truck
 5 0.182 0.310
 10 0.123 0.181
 15 0.089 0.135
 20 0.068 0.118
 25 0.054 0.120
 30 0.044 0.133
 35 0.037 0.156
 40 0.034 0.185
 45 0.033 0.223
 50 0.033 0.264
 55 0.034 0.316
 60 0.037 0.374
 65 0.043 0.439
 700.052
 0.511

These fuel consumption rates can be multiplied by the number of vehicles, the length of the roadway, and the price of fuel to estimate the total fuel-related operating cost. Fuel costs are typically the largest portion of vehicle operating costs. Fuel costs should not include fuel taxes, which are considered transfer payments.

Current and historic fuel prices can be obtained through a variety of sources. A few are listed here:

  • The Consumer Price Index (available at http://www.bls.gov/cpi/home.htm) provides data on average gasoline prices.
  • The Energy Information Administration of the U.S. Department of Energy publishes gasoline and diesel fuel prices for the entire nation, regions, and states on their Gasoline and Diesel Fuel Update webpage (available at http://tonto.eia.doe.gov/oog/info/gdu/gasdiesel.asp).
  • AAA's Daily Fuel Gauge Report (available at http://198.6.95.31/index.asp) gives average daily fuel prices at the national level, by state, and by metropolitan area for both unleaded and diesel fuels.

Non-Fuel-Related Costs

Non-fuel-related costs include the costs of oil, tires, maintenance and repairs, and depreciation. The STEAM model estimates tire and maintenance costs using a fixed cost-per-mile for automobiles and trucks regardless of speed, ignoring depreciation or oil costs. The Cal-B/C model employs the same fixed cost-per-mile plus an additional estimate for depreciation. This depreciation estimate is based on a report by Jack Faucett Associates (1992) for the FHWA. The fixed cost-per-mile estimates for automobiles and trucks used in the Cal-B/C model are listed below.

Non-Fuel Vehicle Operating Costs ($/mile) in 2000 dollars

 Vehicle Class
Cost
 Automobiles $0.165
 Trucks$0.285

Once both components of vehicle operating costs have been determined, they can be summed to find the total vehicle operating costs.

The Cal-B/C and STEAM methodologies estimate vehicle operating costs using VMT and travel speeds. However, as stated earlier in this section, other factors such as speed cycling, roadway gradient, roadway curvature, and road surface can also affect vehicle operating costs. The HER-ST Technical Report Appendix D lists the vehicle operating cost equations that account for these factors in the HERS model (FHWA, 2002). Equations such as these will likely lead to better estimates, though the necessary data may not be available for such a detailed analysis. For many purposes the methodology used by Cal-B/C is appropriate. However, transportation improvements that significantly affect roadway geometry and/or road surface will alter vehicle operating costs and should be taken into account if possible. 

Evaluating Mode Shifts

When evaluating transport projects that cause mode shifting, for example from automobile to walking, cycling, ridesharing or public transit, it is necessary to calculate the changes in marginal costs of each mode. See Litman (2009) for more information.

Sources

Gary Barnes and Peter Langworthy (2004), "Per Mile Costs of Operating Automobiles and Trucks," Transportation Research Record 1864, Transportation Research Board (www.trb.org), pp. 71-77.

Booz-Allen & Hamilton Inc. (1999). California Life-Cycle Benefit/Cost Analysis Model (Cal-B/C)—Technical Supplement to User's Guide. California Department of Transportation. Available at: http://www.dot.ca.gov/hq/tpp/offices/ote/benefit_files/tech_supp.pdf.

FHWA (2002), Highway Economic Requirements System, U.S. Federal Highway Administration (www.fhwa.dot.gov). Available at: www.fhwa.dot.gov/infrastructure/asstmgmt/hersdoc.htm.

Jack Faucett Associates (1992). Cost of Owning and Operating Automobiles, Vans, & Light Trucks 1991. Prepared for the FHWA, Report No. FHWA-PL-92-019.

Todd Litman (2009). "Vehicle Costs," Transportation Costs and Benefits, Victoria Transport Policy Institute. Available at: www.vtpi.org/tca 

Steven E. Polzin, Xuehao Chu and Vishaka Shiva Raman (2008), Exploration of a Shift in Household Transportation Spending from Vehicles to Public Transportation, Center for Urban Transportation Research (www.nctr.usf.edu). Available at www.nctr.usf.edu/pdf/77722.pdf

Ray Barton Associates (2006), Estimation of Costs of Cars and Light Trucks Use per Vehicle-Kilometre in Canada, Analysis Policy Group, Transport Canada (www.tc.gc.ca). Available at: www.bv.transports.gouv.qc.ca/mono/0965382.pdf.

Ray Barton Associates (2006), Estimation Of Costs Of Heavy Vehicle Use Per Vehicle-Kilometre In Canada, Transport Canada (www.tc.gc.ca). Available at: www.bv.transports.gouv.qc.ca/mono/0965385.pdf

TRISP (2005), “Sources of Vehicle Operating Costs,” Economic Evaluation Notes, UK Department for International Development and the World Bank (www.worldbank.org). Available at: http://go.worldbank.org/ME49C4XOH0.

TTI (2004) MicroBENCOST, Texas Transportation Institute (http://tti.tamu.edu).

World Bank (2006), Road Software Tools, The World Bank Group (www.worldbank.org). Available at: www.worldbank.org/transport/roads/tools.htm.

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