wahoonc

This article wandered across my screen this morning via link from a cycling blog. A lot of interesting numbers in there.

The average US household spent $5,477 on car expenses last year in the US, naturally there are some areas that were a higher and some that were lower. That is a substantial bit of money when you consider the state of the economy and unemployment levels.

Aaron

zeppinger

wahoonc

I got a six pack to go with it...

Aaron

gerv 

This confusion below might paint a picture of the cost of ownership compared to the average income:

https://en.wikipedia.org/wiki/Househo..._United_States

And don't forget that you pay the 5,477 with after-tax dollars.

And for that little contribution, aaron, I'll help you with that six-pack.

wahoonc

C'mon...it is Leinies Summer Shandy

Aaron

cooker

The full-cost accounting is pretty complex. If you simply look at what they actually spend - insurance, gas, parking, repairs and maintenence and monthly payments, you get one number. But if you compare life with or without a car, there are many other factors to consider:
- the lost opportunity costs of the money invested in car purchases,
- the potential extra earnings or lost earnings due to comparing time spent driving to the time you would spend on alternate modes of transportation
- the possibility that you would live in a different (more or less expensive) location if you didn't own a car
- health costs of owning a car
- gym costs if you need to compensate for all that time sitting behind the wheel
- the costs of alternate transportation

And then there are the social costs to consider in societies with and without cars: freeway construction costs, ambulance and policing costs, lost tax revenues from land dedicated to roads, public health costs...

This just scratches the surface. It goes on and on.

cruzMOKS

New cars are factored in.

$3000 for used car $400 liability insurance $500 for gas Over 3 years that's $5,700 = $158.33 a month

zeppinger

I doubt most $3,000 used cars will run happily for 3 years by just putting gas into them. What do you fill your tank up with, wishful-thinking?

dynodonn 

The one member of my family, that I personally oversee their car finances, has a yearly expenditure of 3500 dollars a year. Their vehicle is a used one, and the annual total includes loan payment, insurance, fuel, and a predetermined dollar allotment for vehicle maintenance/repairs. This family member has the least annual amount, whereas other family members have 5000 to 8000 dollar annual expenditures.

Robert Foster

My car was paid for in 1992. I have 42,000 origional miles on it and I pay more for gas and oil now than I have for almost all of the 18 years I have owned it. I have had only 4 sets of tires on the car in all of that time and the first set had to be replaced because of dry rot more than wear. I pay about $450.00 a year in insurance and maybe $50 or $60.00 a month for gas and oil. Spread out over the time I have owned it the car cost me about $233.00 a year to buy. $75.00 a year for tires and $720.00 a year for gas and oil. I serviced it myself but lets say servicing was $35 a month that would be $420.00. All in all that is less than $2000.00 a year. That is abetween $4.72 and $5.32 a day for my car 24/7/365. If I were to take the bus in Orange county the daily pass is now $4.00 a day and they are cutting services and terminals. But that is just me.

chewybrian 

This is certainly near the extreme low end. That's only enough gas for 4 or 5,000 miles, when most households would use triple that. They did say household, which might be 2 cars, or at least 2 drivers. And, of course, most drive newer cars, pay interest and comprehensive insurance, depreciation...$500 a month is probably near the mark.

A year ago, I would have argued that I could drive on $200 a month, but, as cooker said, the formula is not so straightforward. I found that I was able to bank the $500 a month when I got rid of my car. But, it comes from all costs. Having the car made it too easy to spend on items I did not really need, like fast food, along with the costs of running the car.

For those who can make the choice to go without a car, the difference in expenses can be life-altering over the years. Imagine what $500 a month could do for your IRA.

wahoonc

If you READ the article you will notice they also include things like parking, tolls and other auto related expenditures. Some parts of the country you have to pay for parking spots at your own residence if you rent, like Boston or NYC. That will run the average up. FWIW I fall below the average but I only drive my personal vehicle ~4000 miles a year, it is 14 years old, paid for and in excellent condition. But when something breaks it costs and will run my average up.

Aaron

cooker

Yes, that is just you. Not many people are still driving a car they bought for $4000 in 1992.

Do you drive to work daily or work from home?

Since you are averaging around 2000 miles a year, how do you end up spending $720 on gas and oil?

gerv 

My son drives a 1995 Toyota that I bought for a lot more money. He drives about 4,000 miles a year (and borrows our family car for longer trips...) and spends a lot of money in gas. I think there's a cylinder missing or something.

Roody

"I own a Ford that my granddad paid off in 1919 that has 7 million miles on it and it runs on used french fry oil and I fix everything myself with zip ties and chewing gum and it only costs me 49 cents a year to run it."

Just kidding, of course. My point is that the experiences of the clever carlight members of this forum are not typical of the average person. But the car cost calculators are trying to be useful for average people, and therein lies the apparent contradiction.

Roody

Good points. And if you live in an area where you don't have to pay to park, then somebody else is paying for your parking. That might be in the form of higher consumer costs in stores, higher taxes to pay for on street parking and municipal lots, or higher rents. The only place there's any free parking is on the Monopoly board.

(BTW, whenever I play Monopoly my friends get a kick out of making me use the little car token.)

cruzMOKS

I agree i have presented the best case scenario. But $5,477 a year? Anyone could beat that if they wanted to. People want nice things, and are willing to pay for it.

RaleighComp

I read an article a few months ago that broke down an average family's expenses. The point of the article was that the average family (across the US), if they NEVER eat out, and NEVER go to a movie, and NEVER engage in any other decadent behavior, they can maybe save about $150-200/month, providing no emergencies EVER come up. I think the model was base on an average house purchased with 20% down (LOL!). What stood out for me from the ariticle was the average car expense. Taking in average registry/DMV fees, gasoline, repairs, average car loan data, I think the average monthly expense (for I think maybe 1.3 or 1.4 cars per family) was between $700 and $800/month per family. That really lit a light bulb above my head. If the average family has about ZERO chance to save ANY money per month, even if they're economically responsible, it seems like they have the best chance to get ahead if they find a way to ditch the gargantuan albotross around their neck that is their car(s). Imagine you live in a city where you could get by without a car and you are the average family saving, at best, $100- $200 per month. If you could give up your car and up that to $1000/month, how much better off are you, and on so many different levels!

Robert Foster

I took the high month and multiplied by 12 to be fair. I rode my bike 8000+ miles last year and drove my car close to 2600. My wife was not able to walk due to a foot operation for a good part of last summer.

I haven't always followed the concept of drive it till the wheels fall off but for the last ten years that has pretty much been my goal. My fuel usage has improved alot over the last three years and I am now using about 1/3 of the fuel I did in 2006. But I was under the impression that the question was current cost of opperating a car and someone mentioned factoring in a used car. While I bought mine new it was used after it was paid for. Like my bicycles proper care will keep one on the road a very long time.

I realize I am not typical and I know what it was like when I was driving on the company's dime. Yes the company paid for my fuel for many years and I never got a fuel bill when they did so. They also paid for my health insurance, put in for my retirement and I never had to pay for parking.

I was simply answering the OPs origional question. I wasn't putting myself up to compare.

wahoonc

Or are they too dense to realize what things really cost?...

I am convinced that a large segment of the US population is financially ignorant or they just stick their heads in the sand and hope the problem goes away. My immediate manager at work is always complaining about being under paid and he just can't make ends meet. It is his lifestyle and nothing more. I make just a bit less than he does, but I don't have a house on the golf course, I don't drive a brand new car every 3 years, I don't go out every weekend to the club, I don't take week long vacations to resorts in the Caribbean in January, etc, etc.

You make your choices and your live with them. I decided a long time ago to be financially conservative and live beneath my means, it has paid off in spades! I am debt free and plan to stay that way. If I could figure out a way to eliminate property taxes I would.

Aaron

zeppinger

I think one major point that a lot of people under represent in the cost of their car is maintenance. Playing with the edmunds website shows that any car over 7-8 years old start inuring major expenses for repairs and maintenance, almost as high as some car payments.

2002 Ford Focus 5 speed manual with 4cyl:
$1,400 repairs
$761 maintenance


2002 Toyota Echo 5 speed manual with 4cyl:
$1,600 repairs
$ 652 maintenance

2007 Honda civic 5 speed manual with 4cyl:
$ 1223 repairs
$ 492 maintenance

These are all pretty much as cheap and reliable of cars as you can get but even well after the payments are done your repair bills start to sky rocket. I think that a lot of people calculate their repair bills based on what they have done recently but often forget about those one time expensive repairs like timing belts/chains, oil flushes, transmission services, ect that add a lot to the average over several years. You can also bet that after that car becomes really old, say like a 92-95 the repair bill is even larger. Maybe people are skipping out on due maintenance at the cost of safety or reliability down the road to save money in the short term?

I-Like-To-Bike

It might help to also consider the costs of alternative transportation and additional travel time for vacation travel, recreation and employment (or lost opportunities for same) when an individual chooses to not own a motor vehicle

ndbiker

Back in 2000 I purchased a 1993 Toyota Corolla Wagon for $3000 (cash). It had 138K miles on it. I finally gave it to the great mechanic in the sky last year with 243K miles. I am sure the cost /year was much lower than $5700.

zeppinger

And you did nothing but change the oil and insert gas into it? Ya right

I had a corolla as well and the damn thing would go through at least one CV boot every two years. Common problem on small front wheel drive compacts.

cooker

That's great, but it's pretty clear you and a few others in this thread are outliers - and probably fairly extreme ones.