Tuesday, 14 August 2012

Why I take the train

So, rail prices have gone up again. Angry commuters have been interviewed on the BBC (well, one) and there have been dark mutterings about "poor service" and "rip-off". Again.

Apart from the well-entrenched position that the service is unreliable (when in fact it's more reliable than ever) one of the main arguments I have heard for owning a car as opposed to getting the train is that it's cheaper. The conversation usually runs along the lines that the cost in petrol is less than the cost of a train ticket.

Obviously this is true. The trouble is, petrol isn't the only cost associated with a car. And I began to wonder, starting from scratch, how far would I have to travel in order to make a car worth my while?

Let's start with a typical journey, one that I make reasonably often. St Neots (where I live) to Southampton (where I party). Let's also assume a few other things. I own a new, reasonably priced, small car. A Fiesta say. That way I don't have to factor in things like 'reliability' because hopefully it won't break down. Let's also assume I drive the average mileage - roughly 13000 miles a year. Assuming I'm using my car for nothing else, this equals (rather conveniently for my maths) about 50 round trips to Southampton a year - about once a week.

From a train fare point of view, if I'm buying my tickets the day before or on the day, the fare is equal to £52.40 if I'm not returning the same day. This means that I am potentially spending £2620 per year on rail fares. This number, of course, goes down considerably if I'm buying my tickets in advance. Easy peasy.

My brand-spanking new Fiesta does an average of 34 MPG, according to Ford's website. A gallon is fairly roughly 3.8 litres, so my Fiesta does 8.95 Miles per litre of fuel I put in it. This is all petrol, by the way. The lowest petrol price near me is 134.9p, so it costs me about 15p per mile I travel in my lovely Fiesta. This means it costs me £1950 in petrol per year to drive it the 13000 miles to and from Southampton repeatedly. At this point, in my car, I'm pretty happy that I have come out nearly £700 ahead of my train taking alter ego. And that's if I'm travelling alone - stick someone willing to pay half the petrol cost and you're really in the money.

Trouble is, that's not the only cost associated with owning a car, and nobody else (except perhaps your parents) is going to help you pay these bits. First off, I can't drive. The average cost of learning to drive in the UK is about £1200, depending on if you pass first time. That gets added on. The cost of actually buying the car (the brand new Fiesta, remember) is £9790 and up. I'm a cheapskate, so I'm going with the basic model with no features. It's essentially bodywork, seats and an engine. Road tax and carbon tax adds on £235. My insurance premium as a new driver on this car is £2220.13 (on the cheapest deal, keeping it in a locked garage, me the only driver etc. on Go Compare). This is below average, I would point out.

This adds up to a whopping £13445.13. Clearly, over the course of a year, I should get the train. So, how long do I have to drive before this becomes worth my while? A few things will happen Firstly, I don't have to repurchase the car. The second is that I won't have to learn to drive again. The third is that my insurance will go down. So, essentially, the only figure that remains the same (assuming it hasn't been changed) is the tax. Let's just pretend for a moment that that's the only thing I have to pay (my insurance is now free - this simplifies things considerably, and it biases the following claculation in the car's favour).

So, in order for my car to be better value than the train, assuming things like rail fares and petrol remain roughly the same, it has to have cost me on average less than £2620 a year. I'm already paying £1950 in fuel and £235 in road tax each year, so that leaves £435. Unfortunately for 'cars are cheaper' advocates, this means I have to drive my car for nearly 31 YEARS for me to go into the black. Assuming that my not-new-car-any-more doesn't break down or require repairing and that I don't pay insurance after the first year. EVEN IF I am taking two other people each time, paying their share of the petrol, it's still around 13 years.

This is for a car costing under £10000. It goes up quite a lot if you start looking into Land Rovers.

From a purely financial point of view, I think I'll stick to the train for now.



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