Tuesday, June 08, 2004

Do the Math

You know, it bugs me when newspaper articles make numerical claims without regard to the underlying math. Today's Washington Post contains an article, "High Gas Prices Send Drivers to Corporate Rental", which opens with this paragraph:
"In April, Silver Spring management consultant Yvonne Braxton stopped driving her 1989 Acura Legend on trips to Pennsylvania, New York and New Jersey. The standard 37.5 cents per mile government reimbursement -- a figure set for 2004 long before gas prices began soaring -- didn't come close to covering her costs anymore."

Yvonne, Yvonne, let's do the math. $.375/mile * 23 miles/gallon = $8.625/gallon you're getting reimbursed! That'll more than cover your gas costs.

Wait a minute, you might say...why is the government standard reimbursing at such a high rate? Well, the fact is that gas costs are not the major cost of owning a car. Every mile Yvonne drives her car is a mile closer to having to buy a new car, and also a mile closer to needing more maintenance. On the other hand, given that Yvonne is driving a 1989 Acura, she has chosen a very reliable and durable car and chosen to keep it a long time...minimizing her costs compared to someone who buys a new car every 3 or 5 years.

It's possible that her total cost for operating the car exceeds $0.375/mile...if the car is starting to break down a lot and require expensive repairs, for example. In that case, however, the change in fuel prices she says she needs -- to $1.50/gallon, or a drop of about $0.60 -- wouldn't significantly effect the total expenses, and wouldn't help if the current situation is that she isn't "close to covering her costs."

Having driven Hondas, I know that getting reimbursed at the government rate can be a pretty good deal. I still sometimes get work to rent a car for me...if I don't want to push my car past the next maintenance threshold, or if I want Christina to be able to take over the driving (since I still haven't gotten around to teaching her how to drive a stick shift). But I don't use bad math to blame it on gas costs.

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