Managing High Cost Of Living And Passion For Buying Cars
Managing High Cost Of Living And Passion For Buying Cars
Automobiles are extremely popular in the United States. Many families even have two or three vehicles — and they’re paying for them as well. AAA estimates that the total cost of owning two cars could range from $12,120 to $25,114 per year in 2019, based on 2019 calculations.
It’s possible that you’ve considered downsizing from two cars to one if you’re currently part of a two-car family (or even live without a car entirely). The answer to that question is a resounding yes or a definitive no.
Being a one-car household can result in significant savings for some families while requiring minimal compromise on their part. Others, on the other hand, find it to be an excessive amount of effort for too little reward. To determine if it is the best option for you, you must first determine how much money you stand to save and what the alternatives are.
Cost Savings from Not Having a Second Automobile
The most obvious advantage of giving up a second car is the money you will receive from the sale of the vehicle. Its value is determined by the age and condition of your vehicle, as well as your geographic location.
A good-condition base-model 2016 Honda Civic with 50,000 miles on the clock, according to Kelley Blue Book, could fetch around $18,500 in October 2021 if you sell the car yourself. In contrast, the same car, with 100,000 miles on it, would be worth approximately $13,500.
That money, in either case, could be extremely beneficial. It could assist you in setting up an emergency fund or dealing with an unexpected expense that arises. Alternatively, it could be used to contribute to college or retirement savings.
The financial advantages of becoming a one-car family, on the other hand, do not end when the second vehicle is sold. Because that car is expensive to maintain, getting rid of it allows you to save money on a recurring basis year after year. The exact amount varies depending on the type of car you have and how much you use it on a daily basis.
If you want to figure out how much money your family would save, you must first figure out how much money your second car is currently costing you. In order to do so, you must add up all of the costs associated with owning the vehicle, from the car payment all the way down to the cost of a parking space.
Payment for a car
If you’re like many other car owners in the United States, you still owe money on your car loan, which is a bad thing.
And, if you do, paying it off reduces the immediate cash flow from the sale of your second car, which is a negative. If you are in default on your car loan, it could even reduce it to less than zero, resulting in you having to pay money out of your own pocket.
However, the extra money you will have available as a result of eliminating that monthly payment may still be sufficient to make it worthwhile. Assuming you’re currently paying $500 per month on your car loan, paying off your car loan would result in an annual savings of $6,000 if you did so.
If you are leasing your second car, you will not be able to receive an immediate payment if you decide to sell it. However, you are still able to save a significant amount of money on a monthly basis.
The cost of fuel for a second vehicle varies greatly from year to year. It is dependent on the gas mileage of your vehicle, the number of miles you drive it each year, and the price of gasoline in your area.
Calculate the number of miles you put on your second car in a year in order to figure out your fuel expenses. To find out how many gallons of gas you use per year, multiply that number by the gas mileage of your vehicle. Then multiply that figure by the price of a gallon of gas in your area to get an idea of your annual cost. (If you have an electric vehicle, you should measure your fuel consumption in kilowatt-hours instead.)
It’s possible that giving up your second car will not save you the entire amount. Using your remaining vehicle for all of your errands and trips will almost certainly result in a higher mileage per year for your vehicle. However, by using methods such as carpooling, public transportation, and walking, you can eliminate at least some of your trips.
Having a second car does not necessarily result in a cost increase for auto insurance. As a result, you can’t simply divide your current policy price in half to determine how much money you’d save.
If you insure both of your vehicles under the same policy, you can typically receive a discount of up to 25 percent per year on your premium. The cost of insuring a second vehicle could be as low as $750 per year if you already pay $1,000 per year to insure your first vehicle.To obtain an accurate estimate, you should inquire with your insurance company about a quote for a policy covering only one vehicle.
Another expense associated with owning two automobiles is the cost of maintenance. You must pay for routine maintenance, such as oil changes, as well as for repairs if your car breaks down.
The more miles you put on your car each year, the more likely it is that your maintenance costs will increase. According to AAA, the cost of maintenance for an electric vehicle ranges from $0.066 per mile for a small car to $0.096 per mile for a mid-sized SUV. You can estimate your yearly cost by multiplying these figures by the number of miles you drive each year. For more information, consult AAA’s driving costs analysis.
Despite the fact that you are driving more miles in your primary vehicle, you are still able to save money. There are some routine maintenance tasks that all automobiles require on a yearly basis, such as replacing the air filter. By getting rid of the second vehicle, you’ll only have to pay for the jobs that require more than one vehicle.
The cost of registering a second car is one expense that can be avoided by getting rid of a second car. The cost of this service varies greatly depending on where you live. In order to calculate it, each state has its own method.
If you are unsure of the cost of your yearly registration, visit the website of your state’s motor vehicle department. If you’re having trouble finding it, try searching the site for “registration fee.” If your state only requires registration renewals every two years, divide the number in half to get an idea of how much it will cost you per year.
When you drive your second car, you are responsible for more than just gas. On highways and bridges, you may be required to pay tolls from time to time. The cost of driving varies significantly depending on where and when you go. Tolls are higher on weekdays than they are on weekends in some areas, and they are even higher during rush hour. Additionally, some bridges charge tolls only when traveling in one direction.
It costs slightly more than $150 per year to pay the $3 toll once a week if you only pay it once a week. That’s about the same amount of money that some families spend on a month’s worth of cable television or cellphone service.
However, if you pay the same $3 toll on your way to and from work five days a week, 50 weeks a year, you will have paid $1,500 in tolls. Your savings account may be sufficient to cover all of your primary vehicle’s insurance costs, plus a little extra.
Consider all of the trips you take in your second car on a regular basis to get an idea of how much money you’ll save. Make a note of which ones have tolls and how much they will cost to cross. To calculate your yearly cost, multiply the cost of the trip by the number of times you make the trip each year. If there is work on the list, the total will add up quickly.
However, it is possible that getting rid of your second car will not save you the entire amount. Regardless of whether you switch to driving your primary vehicle to the same locations, you will still be responsible for paying the tolls. However, by switching to public transportation, walking, or biking, you can significantly reduce or eliminate your carbon footprint.
When you have a second car, it can cost you money even when you are not driving it. If you have to pay for a parking space, whether at home, at work, or while out and about, that’s an additional annual expense you should consider.
The cost of parking varies greatly depending on where you live. Several recent studies have found that the ten most expensive cities in the United States for parking are Dallas, Detroit, Atlanta (including Seattle), Boston (including Chicago), Washington (including Washington, D.C.), Los Angeles (including San Francisco), and New York City (including New York City). Average annual parking costs range from $723 in Dallas to a whopping $5,395 in New York, with Dallas being the most expensive.
Of course, the majority of cities aren’t nearly as expensive as that. Nonetheless, it is an additional expense to consider when determining how much it costs you to own that second car and how much money you could save by not having one.
New Charges for Your Single Automobile
Giving up one’s car can result in additional expenses. You’ll need to find another mode of transportation, which may entail making greater use of your remaining vehicle in some cases.
For example, if you and your spouse each drive two separate cars to work, you might consider carpooling instead. Assuming, however, that picking up and dropping off your spouse at work adds an additional 5 miles to the length of your daily commute, this amounts to approximately 1,250 additional miles per year.
It is also possible to use an alternate mode of transportation in some instances. Walking, for example, is a relatively inexpensive method of transportation. Others, however, such as public transportation, have their own set of expenses. In order to determine how much money you can save by becoming a one-car family, you must first calculate how much money these new expenses will add to your household budget.
Alternatives to Purchasing to buying many Automobile
To figure out how much money you’ll save by not having a second car, you have to think about how you’re currently getting around. Take a sheet of paper and jot down all of the different ways you currently use your car, such as the following:
- Trips to the doctor or the grocery store are examples of errands.
- Taking children to and from school
- Driving children to events and activities, such as sports, is a common occurrence.
- Journeys by car
- Take into consideration alternate modes of transportation for each type of trip on your list. There are numerous options to consider, each with its own set of advantages and disadvantages.
Many short trips can be accomplished on foot. Aside from the wear and tear on your shoes, walking is a completely free form of exercise that is also very beneficial.
Walking, on the other hand, is significantly slower than driving. To make up for the time it takes you to walk to work, you would have to get up an hour earlier in the morning and return home an hour later in the evening every day.
Furthermore, walking isn’t always an option for everyone. If your place of employment is 15 miles away or if there is a major highway between your home and place of employment, it is not practical to make the trip on foot. And inclement weather, such as heavy rain, snow, extreme heat, or poor air quality, can make walking uncomfortable at best and potentially dangerous at worst, according to the American Heart Association.
A bicycle can be a convenient mode of transportation for trips that are too long to be completed on foot. When in reasonable shape, a cyclist can travel at a speed of approximately 15 miles per hour, meaning that you can bike to work in less time than it takes to walk. In addition, cycling can be a convenient mode of transportation for running errands, such as a quick trip to the grocery store.
Cycling, in contrast to walking, entails some initial outlay. It is necessary to purchase a bicycle, as well as some essential accessories, including a helmet, bike lock, and repair kit, in the event that you do not already have one. A decent used bicycle, as well as a basic set of accessories, will most likely set you back at least $200 dollars.
And if you want to use it for errands like grocery shopping, you’ll have to invest in panniers or a trailer, which can easily cost $100 or more per set. However, once you have purchased the bike, it is significantly less expensive to maintain than a car. The Pros’ Closet, an online bike retailer, estimates that the annual maintenance costs for a road bike are on average around $185 dollars.
Cycling, like walking, allows you to get some exercise while also getting some fresh air. Cycling, on the other hand, is still slower than driving. As a result, there is a limit to the length of time you can reasonably spend traveling. Furthermore, not all roads are suitable for cycling.
Consider an electric-assisted bike (also known as an e-bike) or a motor scooter if you’re looking for something that has a little more range than a standard bicycle can provide. However, they can be significantly more expensive to purchase and maintain than a bicycle.
For those who live too far away from their place of employment to commute by foot or bicycle, carpooling with one or more coworkers can be a cost-effective alternative. Even if you split the cost of gas, it is still significantly less expensive than owning a car.
If you currently spend $500 per year on gas for your daily commute, consider the following scenario: If you and a coworker split the cost of the trip, you’d each pay $250 instead of $500. If you share a room with two coworkers, the cost per person would be less than $170 per night.
Of course, this arrangement is only feasible if you are fortunate enough to have coworkers who live nearby and have a work schedule that is similar to yours. Also required is that you maintain a strict schedule in the morning in order to avoid causing delays for your fellow passengers. On the plus side, it provides you with someone to talk to during your commute or allows you to work while someone else drives you somewhere.
Carpooling may be an option for other trips as well, depending on your circumstances. For example, your children may be able to carpool to school or after-school activities with their peers. Weekend errands could even be made easier by splitting the cost of a ride with a neighbor.
Transportation by public transportation
If you live in a city where public transportation is readily available, you may be able to rely on buses, subways, and trains for a significant portion of your journeys. When it comes to commuting and short trips such as errands, public transportation can be a good option.
School buses transport children to and from school in many areas, making it possible for them to rely on them. If there is no official school bus service, older children may be able to take public transportation to school, thereby eliminating the need for parents to drive them there and back home.
Commuting by public transportation allows you to make better use of your time by not having to concentrate on the road. It can also be less stressful than driving in rush-hour traffic during certain times of the day. In addition, you won’t have to worry about finding a parking spot when you get to your destination.
Public transportation, on the other hand, is only reliably available in a few cities and suburbs. Additionally, there isn’t always a route that will take you in the direction that you want to go. It is possible that you will have to change trains or buses multiple times or walk, which will make your journey significantly longer.
It is dependent on your location as to how much it will cost. According to the American Public Transportation Association’s June 2017 Transit Savings Report, a person who switches from driving to taking public transportation for their daily commute can save nearly $9,800 per year on their commute.
That figure, on the other hand, is based on average costs for transportation, gas, and parking. It is possible that costs are higher or lower in your area.
Carpools and public transportation do not always get you to where you want to go. As a result of modern ridesharing applications such as Uber and Lyft, you can simply pay someone to provide you with a lift. Ridesharing is convenient because you can arrange for a car to arrive at your location at the exact time you require it and transport you wherever you desire. It’s the best option for trips that you only need to take once in a while. For example, you could request an Uber to pick you up and take you to the airport or to a doctor’s visit.
For commuting and other routine trips, it’s probably too expensive to use as a primary mode of transportation. By the middle of 2019, Statista estimated that the average cost of an Uber or Lyft trip was approximately $25. Furthermore, ridesharing apps charge higher rates during peak hours, so hiring one during rush hour is likely to be significantly more expensive than taking the bus or even hiring an old-fashioned taxicab during that time.
Car-sharing is another option available in some areas. Services such as Zipcar provide you with access to a vehicle that you can use whenever you need it. Using the service is less expensive than owning a car, because you are sharing ownership costs with the other people who are also using the service. This varies depending on where you live and which service you use. There may be multiple fees, such as a one-time membership fee, a monthly fee, and a fee for each use of the facility.
The cost of using a Zipcar in New Jersey, for example, is $9 per month or $90 per year, plus $12.50 for each hour or $103.75 for each day that the car is used. All expenses, including gas and insurance, are covered by this amount.
Service providers such as Zipcar can be more expensive per hour than public transportation or even ridesharing services. For longer trips, such as a weekend getaway, they are a good choice because you will need a car to get where you are going as well as to get around while you are there.
However, this service is only available in a limited number of locations. Zipcar operates in over 300 cities across the United States and Canada, but they are most commonly found in densely populated areas.
Rental of a vehicle
In some instances, a traditional car rental may be less expensive than using a car-sharing service such as Zipcar. Rental car prices vary widely depending on your location, the company you choose, and the type of vehicle you rent, making it impossible to say which is less expensive per day. You must check prices in your area in order to make a comparison. Rentals, as opposed to car-sharing, have one significant advantage: there is no monthly fee. You only pay for a car on the days that you actually use it. As a result, if you only need a car a few times a year, you’ll likely save money by renting it from a rental car company.
Many areas offer an even more cost-effective alternative in the form of car rentals from peer-to-peer (P2P) marketplaces such as Turo or GetAround. These services connect people who require automobiles with those who own automobiles but are not currently using them.
P2P car-sharing services are more widespread than fleet-based services such as Zipcar, which operate in fewer locations. Turo, for example, is available in over 5,500 cities across the United States and Canada and offers cars for as little as $25 per day to customers. The cost of transportation varies depending on your location and the vehicle you select.
Getting Your Transportation Needs Under Control
Another option for coping with life without a second car is to simply reduce the number of trips you undertake. You will save time and money by choosing this option because you will not have to spend additional time or money on a different mode of transportation.
Working from home, for example, can eliminate the need to commute to and from work every day. Working from home is not an option for everyone, and even those who are able to do so may not wish to do so on a consistent basis. Some workplaces, on the other hand, allow employees to adopt a hybrid approach, in which they come into the office on some days and telecommute on others.
By commuting to work less frequently, you can reduce your reliance on — and consequently your expenditure on public transportation or car-sharing. A third option is to combine errands in order to reduce your transportation needs. For example, suppose you are used to picking up your children from daycare after work while your spouse goes grocery shopping on a regular basis. Even if the errands are in the same general vicinity, you’ll be making two separate trips in two different vehicles to complete them.
Combining the two trips will save you a lot of time and money. As a result, you only need one car to transport them both, and you use less gas as a result. The greater the number of errands that can be combined into a single trip, the more fuel and money you will save.
In Conclusion Lastly,
The ability to save money isn’t the only advantage of becoming a one-car family. Spending less time driving and more time walking or cycling, for example, will result in increased physical activity. Making the switch to walking, biking, or taking public transportation can also make your commute less stressful. Furthermore, if you drive less in total, you will pollute less, making your lifestyle greener as a result of your reduced driving. However, not having a second car can sometimes cause more stress than having one. For example, if your spouse has a meeting at work at the same time you have a doctor’s appointment, it will be much more difficult to make it work with only one car instead of two. However, by anticipating and planning for these events, you can reduce the amount of stress you experience.
Furthermore, the costs and benefits of becoming a one-car family are highly variable and dependent on your specific circumstances. If you have one freelance worker and one stay-at-home parent, the benefits can easily outweigh the costs for a family like yours. However, for a family with two full-time employees and three school-age children, the situation is typically the opposite.
It is not an easy decision to make. Making your own calculations is the only way to figure out what’s best for you in this situation. Calculate how much money you could save, and then discuss the idea with your family to see how they feel about relying on one car for transportation. If everyone agrees that it makes sense, you can go ahead and make the decision with complete confidence in your decision.