In a previous post about how I no longer enjoy driving, I alluded to the cost of a car. As the second post in car week, I’ll review what I and others have learned (often the hard way) about the high costs of car ownership.
Here’s my wildly outrageous assertion: most people have no idea how much it costs to own a car and that ignorance destroys opportunities to buy a house, save for college, start a business, or just enjoy life more. That car you just saw on TV tearing around corners will cost you twice as much money as you think; and the non-monetary costs are nothing to sneeze at either.
The Monetary Cost of Owning A Car
We all know that cars require gas, insurance, maintenance, taxes, and (if you are like most people) have a retail price that includes a down payment and monthly capital and interest payments. These are the costs we plan for (to an extent) and expect, but it’s the other costs that slowly drain us of money and lead some of us to wonder why we can afford to buy a car, but not afford to own it.
One of the best tools for understanding the true cost of owning a car is the Edmunds Total Cost of Ownership calculator. The tool uses Edmunds’ data to show the cost of owning a certain vehicle for five years based on a number of factors. When I ran our current family car through the calculator, I found that our $18,000 car was projected to cost over $37,000 to own for five years. That double-the-purchase-cost figure is about average, and doesn’t include a number of other car-related expenses such as:
- Parking (at work and at home)
- Collision and body repair
- AAA membership
- Satellite radio subscription
- GPS unit/maps
- Traffic and parking tickets
- Garage door opener
- Floor mats
- Tire gauge, tools, cleaners
- Cell phone charger/iPod adapter/ice scraper/fuzzy dice/etc.
- The list goes on: think of all the stuff you have bought or seen others buy
How much are you really spending on your car? If you haven’t sat down to figure the sums, the answer might surprise (or shock) you…I totally understand if you don’t even want to know. Knowing, however, the key to making the right decisions, so if you are ready to find out, I suggest starting with the TCO calculator, or this more simple calculator that also shows what the money you save could do for you.
The Personal Cost of Owning A Car
Not all the of costs of owning a car can be tallied on a ledger. While I am an incorrigible cheapskate, I find these car-related expenses to be the ones I am most glad to be free of:
- Cost to my Health: Having a car and driving it means spending periods of time sitting. Recent studies have shown that too much sitting is incredibly unhealthy.
- Cost of Stress: Another study suggests that commuters face stress levels similar to firefighters, police officers, and soldiers going into combat.
- Social Costs: Driving is a solitary activity and it leads to more solitary activities. When you are commuting, you are not interacting socially; and the ability to run errands during lunch or during your commute makes activities like shopping, that could be social, into solitary activities.
- Cost of Time Lost: The average commute to work (one way) in the United States is just over 25 minutes. If you are in driving, chances are good that those minutes are a total loss, while with transit or carpooling, that time could have a social or other productive use, and with bicycling or walking that time could be used for health.
The Road To Serfdom
If you are not careful, your car can put you in bondage. The money you spend on a car could be used to deliver you from debt, build a rainy day fund, retire early, or even replace the job you dislike with one that fulfills you but may pay less. The personal costs leave you in worse health, shorter life span, and less time to do as you please.
In the next post, I’ll review some ways you might be able to live a full, rich, and happy life without a car. Then just to be fair, in a future post I’ll talk about people who should not bike to work.