The answer depends on a multitude of factors, which are different for everyone. How far is your commute? What kind of car would you be driving if you didn't ride a bicycle? What kind of climate do you live in? Can cycling eliminate any non-transportation costs for you?

In my case, I commute about 20 miles per day by car, at $3.29 per gallon right now in my area. My car gets 23 mpg. That's a daily cost of $2.86. If I work 20 days per month (let's assume 5 days per week and 4 weeks per month) that's $57.22 in fuel savings. When I started commuting by bike every day, I closed my health club membership, figuring that I now get all the exercise I need on my bike. That's an additional $36 per month saved. So now, we're up to $93.22 in savings per month. If fuel prices stay near where they're at now, I'll save about $1100 per year. Now, because I only drive my car about three times a month when I need to haul something big or go something far away, my car maintenance costs are significantly reduced. Let's say I go from 5 oil changes per year down to 2 (you should replace oil every 6 months even if you hardly drive). My typical oil changes cost me about $30 (I run full synthetic and a good oil filter). So I've reduced oil change costs from $150 per year to $60, for an additional $90 per year savings. Our total savings are now approaching $1200. This is all assuming that I am keeping my car. If you decide to eliminate the car altogether your savings go up substantially; however for me that's a choice I'm not prepared to live with right now.

Now you have to fill in the blanks on cost of bike and gear. For me, my bike cost $600 when it was new. I spent an additional $150 on pannier rack and bags, $10 for my front and rear lights, $30 for my computer (not a necessity, you can get by just fine without one), $100 for my gatorskin tires (so far I have about 3500 miles on them, and will need to replace them in the springtime). That covers the hardware. Then there's clothing. I spent $75 to buy a whole bunch of biking shorts on ebay, $100 on a pair of Gore pants for cold and wet weather, $75 on a Cannondale rain jacket, $10 on a rain cover for my helmet, $40 for cold weather gloves, $25 for a balaclava, $8 for an athletic shirt from Target, $40 for an UnderArmor thermal shirt, and $40 for my helmet, $35 for my shoe covers for wet and rainy conditions. The grand total is $1338.

So, all the hard stuff pays for itself in just over a year most of it lasts several years. Now there's maintenance. I go through one chain and cassette per year at a cost of $48. I just replaced a shifter cable after 5 years for $2.50, for an annualized cost of $0.50. I go through one can of CRC Degreaser at $3.75 per can every three months, for an annual cost of 15. My $100 pair of gatorskins have 3500 miles on them I think I can push them to 4000 before replacing them. My bike commute is 14 miles (it's 6 miles shorter taking the MUP through town than driving the car). Riding twenty days per month, that's 280 miles per month, or 3360 miles per year. So, your tires last about 1.25 years. That's makes your annual tire cost $84. I go through about two tubes per year at $16 ($8 each). Two bottles of chain lube, $8 each, for another $16. So, your total maintenance cost is $179.50 per year. I have not yet in 5 years had to replace bottom bracket or wheel bearings, so I'll exclude those costs.

So, your first year, you're looking at $1517.50, then the second and subsequent years are $179.50. Once you make it past about 1.25 years, you're in the money.

Additionally, if you're like me and like riding for exercise and recreation, I already had bikes and would continue to have bikes even if I didn't use them for commuting. So, the initial cost of the bike could be excluded from the commuting cost. That drops the total down to $917.50. Now you only have to ride for 3/4 of a year to recoup your initial costs the first year. After that, you only need to ride for about 2 months each year to cover the ongoing costs.

They key is to ride EVERY DAY that you normally would commute by car. Days that you choose not to ride quickly add up. I know people who ride only two or three days a week and stop when it starts getting below freezing, and they're lucky to break even in a year.