Frugality Decision #3- One less car (fitness bonus included)

post from V

Owning no car is of course an option for some.  For most people, including us with the (non-frugal) dogs, and for people with young kids, perhaps the 0 car solution is not something you'd want to consider.  Although I suggest that if you have an "emergency" with the kids, you are likely not in an emotional state to be driving and perhaps you should consider a cab.


I'll be using the rule of 300 here to emphasize the power of giving up a car in terms of retirement or other very long term savings.


Here's the costs of a mid-cheap, old, paid-with-cash car:
Spoiler - it's about 1900/year or more.
1. Depreciation - the car was about 11k at 3 years old with taxes, and sold for about 1700-2300, depending on how you calculate the value of repairs we recently got for it.  I had the car for about 8.5 years, that's approaching 1050/year.  Just to own the car, you pay nearly 90/mo in depreciation, although this decreases over time.
2. Gasoline ... We drove the car about 85-90k miles in this time.  For simplicity's sake (8.5 years) we drove 10k miles/year, probably about 384 gallons.  Once we got a second car (yes, this is bad), we drove closer to 6k/year than the other years and 6k on the other car.  Even with more long trips logged on the older car.  So 2k/year could be said to be "extra car miles".  At 25MPG that's about 80 gallons, or $280/year at 3.50 a gallon.  Gas is going up though.  When it's more inconvenient to do something, you save trips and become more efficient.  In our case, owning 2 cars is 2 thousand miles less efficient than owning one, because it is too easy to go on more trips.  If you get more than 25mpg, chances are all of your savings are cancelled out by driving closer to the average 15k miles per year.
...and insurance costs an extra $200 or so a year with a second car, though there could be some joint policy benefits.
3. Jacob covers missing out on exercise and buying into a non-sustainable model, and the environment.  If you have 2+ cars, then the "extra" miles are the ones to take into account.  Also, the environment.  Your carbon counts.
4. Repairs.  The old car needs some repairs, and VW is not the cheapest brand to repair.  We're looking at $500+/year on average in the time we've had it, in new tires, brakes, engine parts, oil changes, extra oil, belts, batteries, electrical system repairs (including lights), etc.  We don't have a garage sufficient for repair time, although we can replace lights and batteries.

1900/year for transportation to some places the bus doesn't go/won't do (those dogs again) plus work isn't terrible, as 2 bus passes might cost 1900/year for multi-region in the Puget Sound.  Add a couple of trips to the airport to visit family in cabs or towncars, (not super cheap but cheaper than parking, and luggage is hard to handle on a bus.  I've done it, I will choose to spend my money not to do it again!) and one 1900/year car would be worth it.


But the second car, alas, was the second car, not the only car.
The first car:
1. Depreciation will average more like 2500/year.  Ouch!
2. 10k/year in gasoline at 27MPG, 3.50/gal - remember we only counted extra miles on the other car.  1300/year!  Another hit! Ow!
.. And up to 1000/year to insure depending on insurance.
3. Creating a new car costs the environment quite a bit.
4. Repairs and oil might be 200/year for the first few years
Adding up to maybe 5k/year.


Owning the two cars together could be nearly 7k/year, matching us up with the American statistic of spending 600/month on cars.  (583/mo)
Owning just the older car (10k miles a year instead of 2k) would run around 3k, counting on more repairs and more gas.  (250/mo)
Owning just the newer car would run 5k/year. (416/mo)


If you don't buy the rule of 300, stop here and think of what you'd do with 2k/year? 


If you do somewhat believe the rule, then owning 2 cars costs us 175,000 in long-term savings.
Owning the older car as long as possible (and continuing to own older cars) 75,000.
Owning just the newer car?  125,000.
And just in case, owning no car and having a bicycle (2 bicycles in our case) would probably cost 1,000/year if we got very fancy and counted additional food, though I'm kind of pulling this one out of my ass. (83/mo)  This ends up at about 25,000/year.  I also get free bus rides, so my life would be pretty cheap while working, and I wouldn't need so many bus rides if I quit.


And to the believers in the rule of 300, what would you do if you could retire fifty thousand dollars sooner?


I can rent a truck if I need one, but I respect that not all people have that option.  Handymen need to transport tools, people with 4+ kids may have greater car needs (much cheaper to go on vacation together driving than fly with 6 people, and you could make up the cost of a cheap minivan quickly.
This is why I don't personally advocate 0 cars, just one less if you're not at a minimum.  By no means buy a new car to be your one car, but consider that 1 SUV may be more efficient/price saving than 2 sedans.


Finally, I did promise a fitness bonus.  There are a number of grocery stores within 2 miles of where I live.  Unless I'm making a Costco or other bulk trip, there should be very little reason to drive to the store.  My bus also drops me off about 2 miles from home.  In the summer, DH and I walk home from the stop together when I bus (he comes to get me, so he walks 4 right now).  
That's 2 miles, a little cardio bonus for me!


However
The motorcycle?  A less frugal decision.  What can I say, I'm a work in progress.