In Which the Author Proves by Mathematics that Implementing EZ-Pass in New Hampshire Was a Poor Financial Decision

The busiest of New Hampshire’s toll plazas stands in Hooksett just north of the junction between the Interstate 93-293 division that one uses when driving south from Concord to Manchester, Salem, Nashua, or beyond to Lowell, the 128-I95 corridor, and Boston. From the north, one drives down a long, hilly, three-lane stretch unbroken by exits or signage, the only distraction being the state liquor stores flanking both sides of the highway where out-of-state patrons can purchase alcohol and tobacco products for much less than they’re accustomed to. After that, the road widens, the lines vanish, the cars slow down (but not to the extent required by law), and one is forced to choose between getting off at Exit 11 or merging into the Any Vehicle or EZ-Pass lanes.

EZ-Pass (for those readers outside the northeast) is a small, plastic transponder box that allows motorists to pay tolls without cash by fastening it to the inside of their windshields. The box is scanned by the reader when the car passes through the toll gate, automatically deducting the fee from the user’s EZ-Pass account. The system offers numerous advantages, specifically the benefit of not having to stop at toll plazas (traffic permitting), plus a 30% discount in New Hampshire. (Interestingly, Japan uses a similar system in which vehicle transponders require a separate highway card. The chief benefit of the Japanese system is that one card can easily be used in multiple vehicles, as opposed to the American system, which requires unfastening the EZ-Pass and having the passenger hold it crookedly against the inside of the windshield while the driver slows down enough to catch the signal.)

I do not deny that EZ-Pass is a fine system—my chief qualm is that it displaced New Hampshire’s earlier, more cost-effective system of highway tokens.



When I first became a licensed driver, these tokens were sold by operators in the Any Vehicle lanes of New Hampshire’s toll plazas, where motorists could purchase them as they paid their tolls. (The tokens were not advertised anywhere, I suspect, to keep them a secret from out-of-staters.) A roll of forty tokens cost five dollars. That’s twelve and a half cents per token. But the tokens were worth twenty-five cents each at the tolls. That means that using tokens, one could merge from Route 101 on to I-95 for only twenty-five cents, or pass through the Hooksett toll plaza for thirty-seven and a half cents (the cost of which has since been raised to a dollar). This is less than the price of a candy bar.

When New Hampshire adopted the EZ-Pass system in 2005 (before which time it was the only New England toll-collecting state not to offer an electronic alternative), it discontinued the token system. (It also eliminated the Exact Change lanes with the baskets you had to throw your coins into, though these can still be seen along the Everett Turnpike in Merrimack.) The savings rate was also reduced from fifty percent with tokens to thirty percent using EZ-Pass. That loss of twenty percent was presumably a trade-off for the convenience of the new system. Tokens had to go because it would silly to offer two money-saving alternatives. Besides, a twenty-percent difference is a small price to pay for convenience. Or is it?

Let’s say that a motorist commutes from his home in rural Hopkinton, through the Hooksett toll plaza, to the large, windowless manufacturing building off Exit 2 in Salem that houses his workspace. Let’s also assume that his company grants him one week off at Christmas during shutdown, plus another weeklong vacation of his choosing. (There are of course other company holidays and sick days, but to keep the numbers round, let us also say that he takes various unrelated trips through the toll plaza that cancel out these days.) That means that our hypothetical commuter crosses the toll plaza an average of ten times a week (once northbound and once southbound), fifty weeks a year, at the cost of one dollar per toll.

Using cash, this would cost $500.
Using EZ-Pass, this would cost $350.
Using highway tokens, this would only cost $250.

However, I have neglected to include the initial cost of the EZ-Pass, which the New Hampshire Department of Transportation currently sells for $20.95 (or $33.04 for exterior transponders). This raises the cost of using EZ-Pass to $370.95, meaning that tokens are now the cheaper option by $120.95 the first year.

This twenty ninety-five (which was actually less for those who purchased transponders during the transition period from tokens to EZ-Pass), can, however, be viewed as an investment for those who still want to save some money. Again, using the Hooksett toll plaza as an example, EZ-Pass users save thirty cents at each crossing. This means that users can recover their initial costs after approximately seventy trips. This is opposed to a roll of tokens, which pays for itself after five trips; or the equivalent $21 in tokens, which still pays for itself after only twenty-one trips. The reason for this striking difference is that EZ-Pass, as added equipment, puts only thirty percent of the toll fee towards recovering the initial investment, as opposed to tokens, which, as a form of currency, allow one hundred percent of the toll fee to go towards recovering the initial investment.

Let’s also consider the long-term impact of using EZ-Pass over tokens. Let’s say our hypothetical commuter lives in Hopkinton and works in Salem (or some other office complex in Hudson, Nashua, Merrimack, or Northern Massachusetts) his entire working life, from age twenty-two until age sixty-five, maintaining the same toll-use frequency outlined above. (This seems a reasonable estimate, considering that time spent living or working outside the toll zone will probably cancel out non-commuting trips taken between the ages of sixteen and twenty-two, or between ages sixty-five and death.) Let’s also assume that the Hooksett toll rate stays at one dollar for those forty-three years.

Over his lifetime, using cash, that commuter would pay $21,500.
Over his lifetime, using EZ-Pass, that commuter would pay $15,050.
Over his lifetime, using highway tokens, that commuter would pay $10,750.

The tokens are now the cheaper option by $4,300 ($4,320.95 if one counts the initial transponder cost). I consider that a large price to pay for a little convenience.

Unfortunately, the issue isn’t worth debating, because tokens are gone forever and they’re never coming back. EZ-Pass of course frees motorists from having to roll down their windows and fish out their cash, makes sense in congested urban areas, and saves a lot of time (including the time it takes to buy tokens), but it also eliminated an option that saved people a lot of money. And not having that option bothers me. Like so many other cost-effective choices, tokens have been replaced by newer, more popular technology that people can use easily while feeling confident that they’re keeping up with the changing times. We live in a more expensive world, but mean incomes haven’t gone up very much in the past few decades. We’re also in the middle of an economic crisis where people are burdened by joblessness, high debt, mortgage foreclosures, home repossessions, large student loans, skyrocketing health insurance costs, strict borrowing guidelines, high gas prices, low savings rates, and an increasingly unreliable Social Security system.

I don’t think the government should force anyone to save money by using tokens instead of an EZ-Pass. But shouldn’t it at least have given them the option?

As a consumer who prefers saving money over convenience, however, I’ve made my decision. I’ll take Route 3A instead.