Believe it or Not, Driving Your Car Now Costs Less Than Ever Before

For a lot of us, driving is a major expense. When we watch the numbers spin on the gas pump, we may think back to a time when gasoline cost a dollar a gallon, or, if we are old enough, even 25 cents a gallon.

But were the “good ol’ days” of low gas prices really that good? Let’s not forget that back when gas was cheaper, wages were lower, too. What’s more, the cars we drove back when didn’t get the mileage today’s models do. What does the cost of driving look like if we take all those factors into account?

One way to answer that question is to restate the cost of driving in terms of how many minutes we need to work to buy the gas we need to drive our car for a mile—call it minutes worked per mile driven. The results might surprise you.

Maybe your great-grandpa worked in the original factory where Henry Ford built his Model T. If he did, he earned about 50 cents an hour—enough to buy two gallons of gas at the 1918 price of 25 cents a gallon. If he could afford to buy one of the Model T’s he worked on, he would have gotten about 17 miles a gallon. That works out to 1.7 minutes worked per mile.

Fast forward to 1950 and the kind of Ford that James Dean might have driven. Of course, James Dean was a movie star—a factory worker of his generation would only have earned about $1.60 an hour. Gasoline was a little cheaper than in the Model T era, averaging just 18 cents a gallon in 1950, but the ’50 Ford’s big V-8 only got 14 miles per gallon. Figure it out, and you get about 28 seconds worked per mile driven.

And what about today? Let’s put electric cars and hybrids to one side, and talk about plain gas burners. Ford’s best conventional model is a Fiesta with a 3-cylinder turbocharged gasoline engine, rated at 36 miles per gallon. (That happens to be the model I drive; mine does a little better than the sticker promises, but we’ll go by the official EPA rating.) The average nonsupervisory production worker earns $20.74 cents as of December 2014, and, thanks to the recent plunge in oil prices, a gallon of regular gasoline averages $2.40. Do the math, and it comes out to just 11 seconds of work per mile driven—nine times less than the cost of driving a Model T in 1918!

Here’s the whole story in one chart. After 1964, the chart uses government data to track minutes worked per mile driven, based on the fuel economy of all cars on the road, both old and new. Before that, it uses estimates for selected popular Ford models. And what do you know, it looks like driving my little 2014 Fiesta costs less, in minutes worked per mile, than any conventional production model at any time in history.

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Follow this link for a slideshow with more data and some cool pictures of classic cars.

Written by

Economist, Senior Fellow at Niskanen Center, Yale Ph.D. Interests include environment, health care policy, social safety net, economic freedom.

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