Finding the cheapest way to get to work.

The NJ Turnpike Authority raised the toll on the Garden State Parkway to $1.50.

Question: When driving to work, should I take the parkway and pay the toll, or should I take side streets in order to avoid the toll?

Assumptions: Car gets 19 MPG city and 29 MPG highway.  Gas costs $3.75/gallon.  Ignore the value of time saved, etc.
I identified three alternative routes:
  1. Side streets (10.0 miles)
  2. Parkway (10.9 miles)
  3. Hybrid (Parkway until you get near the tolls, get off at the exit before the toll, and then get back onto the exit after the toll – 14.1 miles)
2007 Acura TL
2007 Acura TL by 123 Chroma Pixels, on Flickr
Let’s examine each alternative.
Side streets
10.0 miles / 19 MPG x $3.75 = $1.97 total cost.
Parkway
10.9 miles / 29 MPG x $3.75 = $1.41 cost + $1.50 toll = $2.91 total cost
Hybrid
Assume 25 MPG.*
14.1 miles / 25 MPG x $3.75 = $2.12 total cost
Cheapest option: take the side streets.
What about driving home from work?  There is no toll.  Therefore, cheapest option to drive home would be the Parkway.
The savings per trip (Side streets versus Parkway) comes to $2.91 – 1.97 = $0.94.  Assuming I drive to work 220 times in a year, I’m saving $206.80 by taking the side streets.
* I estimated that this would be closer to the highway mileage than the city mileage because most of the route would still be highway miles.

About Mark P. Holtzman

Chair of Accounting Department at Seton Hall University. PhD from The University of Texas at Austin. Worked at Deloitte's New York Office. BSBA from Hofstra University.

One Response to “Finding the cheapest way to get to work.”

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