In my last post, I mentioned that I’ve only driven my car 10,000 miles in the last three years. A reader asked whether I’d considered getting rid of the car all together, and I thought that our conversation deserved its own post, in case some people had missed it in the comments section. This was my response to Henry:
“You bring up a good point, and getting rid of my car is something I’ve considered. However, I can’t see a way that it would make sense, financially or practically. Pretty much the only time I need to use it is when I go to the city about ten miles from here. We’ve tried riding our bikes in there, but the only roads into town are fast, with small shoulders, and we just don’t feel comfortable on them. There is no public transportation between here and there. And there are no places to rent a car in our town. I wouldn’t feel comfortable borrowing a neighbor’s car – we know our neighbors well enough to say hi and chat for a while, but borrowing someone’s car (for me anyway) would require a lot closer relationship than that.
I did the math a while back about how much my car is costing us. I always average at least 32 mpg, city and highway combined. If we were to borrow or rent a car for the 3000 miles I drive each year, we’d still have to pay for that gas (and there’s no public transportation here, so that’s not an option). I pay $250/year for insurance, and $65/year for registration. And in the seven plus years that we’ve owned my car, we’ve spent less than $1500 total in maintenance (including a new windshield, as the original one was cracked when we bought the car). So my car is costing us just over $500/year plus gasoline costs. (We paid $2300 cash for the car in 2003, so there has never been any monthly cost associated with buying the car).
It’s hard to see how we could get rid of the car and come up with an alternative way of getting around when we need to leave our town, that would cost less than $500/year. I’ve read that the average American spends something like $8000/year on a car, and in that case, I’m sure there are much more financially practical options. But I’d say I’m on the low end of the scale in terms of transportation costs, and there just aren’t that many other alternatives in a town with no car sharing program, no rental places, and no public transportation.”
Henry replied with a perspective about how much his own car used to cost, living in Europe, and how much better his life is now that he no longer has the car (a common theme that I hear quite a bit from other car-free folks):
“I keep forgetting just how cheap cars are to run in the US. I don’t know whether this makes you all very lucky or very unlucky. The maths you gave would be quickly dismissed as hopelessly naïve and the worst kind of wishful thinking in Europe. $500 a year!! I live in Austria – let me share my equivalent calculations for the car I used to have (2005 VW Sharan). The car was €23,000 when I bought it back in 2007. Since then it depreciated to €15,000 when I sold it a few months ago. I averaged 7 litres per 100km (Google says that’s 33.6 mpg in your language) and drove about 15,000 mostly unnecessary kilometres annually. At €1.20/litre (very approx. $6.50/gallon) that’s quite expensive. Because we had a small knock a couple of years back, our insurance was €1,712 (not a typo!) last year. I have averaged about €1,200 in annual servicing costs and for things like new winter tyres and a new air conditioning system. We also have motorway vignettes, annual parking fees in our town, etc.
The thing is, although I’m not exactly rich, I could afford it easily, so never questioned whether it represented value for money. When I started taking my finances by the scruff of the neck earlier this year, I was shocked at how much it cost to run – the best part of €8,000 a year! I knew cars were expensive, but I didn’t realise that it was such a drain on me. To top it all off, most of the driving I was doing was to out of town clients so that I could earn enough money to pay for the car. The money I was making by going out to them almost exactly balanced the cost of the car. I got rid of the car and the clients and am in the same shape financially, even when the cost of the occasional taxi or car hire is included. This means I now have time to play football (soccer) in the park with my kids and I also have one less thing in my life to worry about. I love how liberating it is to get rid of stuff.
Sounds like there might be a business opportunity for a start-up car sharing business in your community. ?”
Henry’s experience with owning a car sounds a lot more like the average costs here in the US than my own experience (except for the gasoline cost – I’ve always thought that if the US were to catch up with the rest of the world in terms of the price of gasoline, there would be a lot less driving here). The main reason my insurance and registration are so low is because my car is 19 years old. Registration fees are based on the value of the vehicle, so if I had a $25,000 car, I would be paying a lot more to register it each year. And because my car is worth so little, I only carry liability insurance. I have lots of liability insurance, as that’s not something I feel is worth scrimping on – if I ever need it, I want to be sure that there’s plenty of it there. But there’s no need to pay to insure against damage to my own car, as the cost of the insurance would quickly exceed the value of the car. One thing that I’ve done to keep my insurance costs as low as possible is to be a very careful driver. I’ve never had a ticket in my life, which helps quite a bit. We also have our liability umbrella policy and our homeowners policy with the same company that insures our cars, and that gives us a 15% discount.
I have been very fortunate in terms of how few problems my car has had over the years. It’s a Honda, and I’m convinced that they build very good cars. But a huge part of it has to do with how little I drive. If you only drive 3000 – 4000 miles per year, it makes sense that your car will last three times as long as one that is driven 12,000 miles per year.
I did seriously think about selling my car earlier this summer. We would still have my husband’s car (a 20 year old Audi that has similar maintenance, insurance, and registration costs as my car), but his has far less room in it for things like the dog and groceries. His car has about 100,000 fewer miles on it than mine though, so it wouldn’t have made sense at all to get rid of his and keep mine (even though my car has been going strong for years, it does have 221,000 miles on it, and I realize it’s not going to last forever). I checked the Blue Book value on my car, and it was about $1000. But we decided that the convenience of having the car is worth more to us than the thousand dollars would be. There’s plenty of space in our garage for my car, and there’s no issue with parking in our town (if we lived in a city where we had to pay for parking, that would sway things more in favor of getting rid of the car).
If and when we get to a point where my car needs extensive and very costly repairs, we’ll reconsider. But for now, we figure that we might as well keep it as long as it’s running well and costing us so little to insure, register, and maintain. And of course, I am always focused on how I can reduce my mileage as much as possible, and use the car only when I really need it, as opposed to every time I need to go somewhere.
What do you think? I know it’s very feasible to live without a car in a big city that has public transportation and car sharing programs, but have any of you done it while living in a small town without any of those resources? What does your car cost you each year? How high would that number have to be to convince you that the car’s not worth it?
We did also consider renting a car for long journeys and when we go on vacation. That way we would only have to pay for the use of a car once or twice a year. We aren’t sure if this is feasible or not, but it’s a possibility. Take cheap car hire in France for example: we could drive from coast to coast, through Paris, up to Nice if we wanted to – all at our own convenience – without owning a car of our own and having to pay car expenses year-round.