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Even with a less efficient car, a car and its occupants can be driven 10,000 miles for a gasoline cost of approximately $1,600 at current prices.

I find a few problem assumptions here...

(1) It looks to me like you assumed a less efficient car was 20 mpg; many people would be overjoyed if they could get 20 mpg!

(2) You seem to have used $3.20/gallon as the gas price. I live in a state with one of the lowest gas prices and the discount station around the corner from me is $3.40/gallon for regular..

(3) You use 10,000 miles as your baseline. The average car in the United States is driven more than 12,000 miles. And most households have 2 or more cars. So a safer number to use for this would be closer to 25,000 miles.

If we stick with your 20 mpg, but we bump the gas price up to $3.50 (it is expected to peak around $4/gallon later this year) and increase the miles to 25K, we get a household gasoline cost of $4375. Dropping the fuel economy to 15 mpg, the cost increases to nearly $6K/year.

Consider that, before taxes, the median household income is right around $50,000. Assorted taxes will take away about $10K. So gas this year ends up being more than 10% of the budget for a pretty typical household.

(Not part of a typical household.)
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