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In March of 2012 I started a new experiment, getting around without a car in the suburbs.
My wife and I have each had a car for our entire relationship, so it wasn’t without a bit of nervousness that I gave up my car. However, in the grand tradition of lifestyle changes, I was being bribed.
There were limited parking spaces at my workplace, so to get me out of my spot, my work would pay for my public transit pass for as long as I worked there. This was just what got me to stop driving to work, but it was the catalyst for the decision to give up my car and for us to become a one-car family.
There are lots of reasons to give up a second car. I won’t bore you with all the details, but suffice to say that my vehicle was 13 years old, and my wife and I are planning on purchasing a condo in the next few years. In condo buildings, the cost of an additional parking space is roughly comparable to the cost of an additional bedroom. As I think more living space beats more parking space every time, we needed to figure out a way to get down to one car eventually, and this was a good excuse.
I don’t think the circumstances will be the same for everyone, but the decision to take public transportation breaks down to two simple numbers: Time and Money. Here’s how the math worked out for me in each category.
Time is the easy one. It takes me approximately one hour to get to work by car. While I’m generally a bit quicker, let’s say my bus commute is an hour and a half. My commute is through hard traffic, so I find the bus ride a lot more relaxing. For one extra hour, I get to not have to drive. Instead I read, write, ask email, and do anything but drive. Let’s say that adds up to about 200 additional hours in travel per year. Suffice to say, I find my commute a lot more relaxing and productive now. But, what kind of dollar value do I get for taking the longer commute? Is it worth my time?
Whenever you look at getting a car or getting rid of a car, there are some fixed expenses and some variable expenses that you should consider.
Insurance is one of the fixed car costs that you can’t avoid. Prior to giving up my car, the insurance bill for my wife and I and our rental insurance was $341, now it is $210. This saves me $131 per month or $1,572 per year.
Gas is another cost that cannot be avoided. My car had a 50 liter tank. Let’s assume I got a good price of $1.25 per liter for gas, which means I would pay $62.50 if I filled my tank up from empty. I filled up every week and a half, but some of that was personal driving, so let’s used 2 full tanks of gas every month. This means I save $125 per month in gas. Add that to my $131 in insurance savings and I am saving $256 per month, or $3,072 per year. Divide that by my 200 extra hours a year on the road, and I’m essentially getting paid $15.36 per hour to relax and read my book. Not a bad wage for doing almost nothing.
Now, if you look a bit deeper, you realize that gas and insurance are just the easiest fixed costs to calculate of car ownership. From the moment you buy your car, you are in a constant battle against parts that wear down. I would typically need to get 3 oil changes in a year. You need to replace tires, brake pads, and all the other parts that get used up over time, and none of those are cheap. That’s not even counting if something breaks down! Then there is the cost of registering a car, the license plates, and all of the other fees you must pay.
When you count in routine maintenance, I am easily saving hundreds of dollars more a year. Add in the larger repairs that typically come with an older car, and I could be saving up to a couple of thousand dollars a year.
So, while I was a bit nervous to give up my car, I’m saving myself a guaranteed $3,072 per year, with a potential savings of much more. While this saved money does come at a cost of some of my time, I’m allowed to relax and read during that time (two things that bring me great satisfaction) and I’m essentially paid $15.36 for my time.
Why did it take me so long to give up my car?
Do you think you can give up your car? Do you think that it can truly make your financial life better? Feel free to share your comments and thoughts below. I would love to hear your them.
Author Bio: Alex blogs at Searching for Happy and is experimenting with ways to have a happier, healthier, and more productive life.