Is having a car worth $4,800 a year?
My husband and I have been talking about getting rid of our car — we live close to a public transit system that can take us pretty much anywhere we need to go. There are also more rental options around us, with Zipcar and Autoshare cars parked all over the place these days. And we have shops and services in our downtown neighborhood. We reckon we could save over $400 month on car-related costs (above and beyond the price of the vehicle we drive). That’s $4,800 a year that could go to something else.
While people always talk about how cheap or expensive cars are to buy, we don’t talk enough about how much they cost to actually own and maintain. It’s way more than the just sticker price. Here’s what our car costs us on a monthly basis:
- Insurance: $120
- Permit for street parking: $13
- Gas: $120
- Parking: $100
- Repairs and maintenance: $50
Total: $403
And if think you don’t need to worry about repairs and maintenance because your car is new, think again. Our car is actually quite new and under warranty — the $50 I noted above reflects the big dent someone put in it at the grocery store. It wasn’t worth claiming on our insurance because of our deductible, which is another reason to budget for car repairs even when you have car insurance.
Of course, as a Canadian, I know many of us have to rely on a car to get anywhere. And I also know people have an emotional attachment to car ownership and driving — my husband has always had a car so it's hard for him to imagine not having one. On the other hand, I was never much of a car person. I didn't get my license until I was in my 20s and I never really drove regularly until I met my husband and got access to his car.
To be honest, we probably won’t get rid of our car any time soon given that we have small kids. In our case, it’s just easier to have one. But tallying up all the expenses associated with your car is a really useful and important exercise — and it might even make you think twice before buying a second or third car.
It’s definitely been an eye-opener for us.
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