The Myth of European Driving

One of the great “truths” is that driving in Europe is expensive. My intention today is to bust that myth.

Lets start with car prices themselves. A typical Ford Focus runs around $20,000 in the US and 17,000 GBP in the UK. It’s difficult to get an exact comparison due to different styles, taxes and standard features. However the US version appears to be marginally cheaper (exchange rate at present is about 1 Pound to 1.3 US dollars). However I would argue that this isn’t a totally fair comparison. In the US a Ford Focus would be a pretty small car. In the UK it would be a pretty large one. It’s not unusual in the US to spend $40-50,000 on a car.

The top three selling vehicles in the US in 2017 were all trucks with the Ford F Series being the most popular. As an aside I personally don’t understand why so many people buy trucks, is everyone lugging stuff around all weekend? The base price of an F150 is $30,000. It would seem to me if you are going to buy one then you would want to pimp it out a bit in which case you are definitely looking at over $40,000.

By contrast the best selling vehicle in the UK is the Ford Fiesta, base price 14,000 GBP (around $18,000). All the top ten are of a similar size.

Lets also look at how many vehicles are actually on the road. In the US there are about 900 cars per 1000 people. This is the largest per capita in the world apart from San Marino, which is clearly an outlier due to the size of the micro state. The UK has around 520 per thousand people or almost half as many, pretty much all European countries have similar ownership rates. New York is the only state in the US that has rate similar to the Europe. This is because of the presence of New York City where most people don’t have cars due to the lack of parking and the European style public transportation network. So basically an average family in the US might have 3 or even 4 cars. I certainly know people who have a regular car for commuting to work and another larger vehicle for weekend trips.

So based on this the average UK citizen is buying half as many cars, and paying less for them.

So now we get to the main driving force of the post. The actual cost of driving on a daily basis. Gas in the US is roughly $3.00 per gallon. There is a lot of regional variation though with prices about 50c per gallon more in the West and 50c per gallon less in the South.

In the UK petrol is about 1.30 GBP per litre. A litre is 0.22 UK gallons. And a UK gallon is 25% more than a US gallo. With an exchange rate of 1.3 then a US gallon of petrol in the UK is

(1.30GBP /0.22) X 0.8 X 1.3 = $6.14 per US gallon.

So petrol in the UK is about twice the price of gas in the US. The main reason for this is the amount of tax levied. In the UK tax levied is 57.95p per litre plus a 20% VAT (essentially sales tax). so the rate is at least 50% of the petrol price. In the US tax is 18.4c per gallon plus state taxes so it averages out at about 30c per gallon.

Diesel prices in the UK are similar to petrol, whereas in the US diesel is not common. The main reason for this is that diesel engines are more expensive upfront and create more nitrogen oxide, however they produce at least 30% better fuel efficiency and less green house gasses.

So lets go back to our Ford Focus from the start. in the UK the diesel version of this gets 80mpg (about 65mpg US). The US gas version gets about 30mpg (higher obviously on the highway).

So essentially you are paying twice the price for fuel in the UK but get about twice the fuel efficiency. Therefore the overall impact is a wash. Although I would argue that better fuel efficiency is better for the environment.

Clearly there are other factors in play, for example the rise of hybrids and full electrics as well as the advent of more ride sharing opportunities (the average car spends 90%+ of its time sitting in a garage or driveway).

It’s a common perception in the US that motoring in the Europe is expensive, however I don’t think that stands up to scrutiny. Certainly those traveling for vacation where outside the rental the gas is the biggest expense people shouldn’t be put off.

 

 

 

 

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Gary W

“So petrol in the UK is about twice the price of gas in the US. ” Brilliant wordplay.