Cool article from the Guelph Mercury a few weeks ago.
I’m someone who makes someone do the math when it comes to buying a “cheaper” house out in the sprawling suburbs… you have to incorporate the cost of driving to and from everywhere into your calculations. You don’t really have the option of walking or biking or taking public transit everywhere. Everything is done in a car:
At first blush it seems logical to put down roots in Guelph. Why battle for a small home in the Greater Toronto Area’s super-hot housing market, when, according to the Canada Mortgage and Housing Corporation you can save $91,000 by living in Guelph and environs?
But the Mercury decided to dig a little deeper. Using a provincial government cost calculator, we examined how much the daily grind to the GTA really chews up.
We estimated a round trip to downtown Toronto at 250 kilometres per workday. We accounted for three weeks off the road for vacation time. That is 1,250 km a week for 61,250 kilometres a year.
The operating cost per kilometre, including fuel at 75 cents per litre, came to 24 cents per kilometre (see chart). For a 2004 Dodge Caravan the trip works out to $14,700 a year.
That becomes a whopping $73,500 over five years. With both couples commuting in different vehicles, the cost translates into a staggering $147,000.
That’s only over 5 years. Extrapolate that over a 30-year working life, and you’re looking at $882,000 that you’ve spent on your cars. I can think of much better uses for $882,000.
Saving a bit of money for a bigger house doesn’t make sense now, does it?
Links to online calculator and other scenarios at the Guelph Mercury.