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Chapter 8: Moped Math: A Real Life Example

The potential financial savings of riding a moped versus driving a car are frequently touted by users or salespeople of mopeds. But, what are those savings, really? Well, let�s see. The following is a hypothetical example of a real-life scenario. It can easily be adjusted to suit your own situation.

Let�s say you live five miles away from work and intend to ride a moped on your typical, five-day per week commute. Assuming two weeks per year of vacation time, and five other holidays, this means you commute forty-nine weeks per year. Multiply forty-nine weeks by five days per week by ten miles commuted per day, and you are commuting 2450 miles per year to work.

Now factor in the price of gas and gas mileage of a moped versus a typical, V6-powered car or small SUV. This type of vehicle can be expected to get approximately 20 miles per gallon (perhaps a generous estimate) in the city. A moped, in contrast, will typically get more than a hundred miles per gallon. So, your car will require 122.5 gallons of gas in order to drive you to work for a year. Your moped will require 24.5 gallons. If gasoline is $3 a gallon, your moped, at $73.50 spent per year on gas, will save you $294 per year in gas versus the $367.50 you would have spent commuting in a car.

Now let�s consider the price of the vehicle. A basic, street-legal moped can be purchased for approximately $800. Addition of accessories and features can bring a higher end model to about $2000. Compare that to the price of a new, base-model Toyota Camry: approximately $20,000 and you have saved at least ten times the initial cost of the vehicle.

"But I already have a car!"

You do? Great! You are even better off purchasing a moped as a second vehicle. While mopeds can be a fabulous money saver, they can�t do everything. Any time you need to be on a freeway, transport cargo, or commute in bad weather, a car is a more realistic option than a moped. If you use your moped to get to work each day, while reserving that SUV for weekend outings and road trips, the savings of almost $300 per year in gas alone means that your moped will have paid for its own initial cost within 3-4 years, no matter which model you choose.

The example set above only considers gas, but it is important to realize that virtually all maintenance costs will be lower for a moped than for a car. Each time you ride your moped to work rather than driving, you will be saving on wear and tear of the vehicle as well.

Last, there is the consideration of financing. For one thing, it is much easier for most consumers to come up with $800-$1000 than $20,000. Thus, the chances of a new moped being purchased in cash are much greater than those for a car. Consider a 6.5% interest rate on a new car, using that saved $1000 as a down payment and financing a 36-month term. You will actually pay $22,072 for the car over the life of the loan, and the money spent on its financing will more than double the price of a new moped.

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