Total vehicle miles of travel (VMT) declined 2.9% in December 2012 versus December 2011. Not surprisingly, the biggest drop was recorded in the Northeast.
For the full year 2012, VMT rose just 0.3%. Relative to the peak reached in November 2007, VMT (on a 12-montrh rolling basis) is now down 3.3%. As the graph indicates, it is now much more likely that even employment will get back to its previous peak before VMT does, especially given the approximate 50-cent increase in gas prices so far this year.
A 4.9% increase in insurance costs over the past year is also weighing on drivers. That rise occurred despite a sharp drop in accident rates. Blame it on the inability of insurance companies to earn investment income in today’s low interest rate environment.
The sad fact is that even though consumers have curtailed unnecessary driving, bought more fuel efficient vehicles, and driven more safely, it still costs them more to get from point A to point B.