Have you ever considered what the total costs of car ownership are? I mean, sure, there are the typical “new or used,” “lease or buy” questions, but paying for the car itself is only one (small!) part of the story.
My car is ten years old, and has been paid off for some time. I realized it may be a good idea to start putting money away towards the purchase of a new car. I am hoping to get at least five more years out of this one (the mileage is very low for it’s age), but recognize that the more money I have to put down on the next one, the easier it will be on my monthly budget! So, in true financial analyst fashion I made a spreadsheet with some lines:
1) Buy Car
2) Fuel Car
3) Maintain Car
This seems reasonable right? But then my brain gets thinking… and I add a few more categories:
4) Insure Car
5) Parking Expense
6) Other Catch All
The last category is for things like car washes, windshield washer fluid, and furry steering wheel covers (if you are into that sort of thing).
When I started to add it up, the cost of owning a car was ALARMING. I’m talking, consider selling your house and buying a place near the office so you can walk to work, alarming. I currently have no car payments and I’m spending $9,000 per year on owning a car!!! The interesting thing is this is actually on the low end of how much it might cost the “average” person for a few reasons: 1. I have a Corolla which are known for great gas mileage, 2. I get discounts with my insurance company (shop around!), 3. I am anal about regular maintenance to avoid larger problems. So you could be spending even more! How does it add up? Check it out
So this has taught me a few things:
1) I need to start saving like, yesterday, for the new car that will eventually be in the driveway
2) I need to move to the apartment building beside my office and adopt a car less lifestyle
3) Take money saved with new lifestyle and go on amazing trip to Europe