Comments on: The True Cost of Car Ownership http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/ personal finance that makes cents Tue, 07 Oct 2008 02:42:33 +0000 http://wordpress.org/?v=2.5.1 By: Gary http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-141259 Gary Wed, 23 Jul 2008 04:35:23 +0000 http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-141259 The statement below doesn't add up My Ford Focus gets roughly 310 miles on eleven gallons of fuel, for an average of 28.2 mpg. If fuel is at $3.00/gallon instead of $2.00/gallon, I’m paying 10.3% more — $725/year — to run my car. * Fuel: $1,646.37 ($0.0812 per mile) * Insurance: $762.93 ($0.0376 per mile) * Service: $507.07 ($0.0250 per mile) If your fuel cost is 1,646.37 10% more is an additional 164.63 you say $725? If your currently paying $2.00 and the price goes 3.00 per gallon. That would be a 50% increase in fuel cost per year or $823 The statement below doesn’t add up

My Ford Focus gets roughly 310 miles on eleven gallons of fuel, for an average of 28.2 mpg. If fuel is at $3.00/gallon instead of $2.00/gallon, I’m paying 10.3% more — $725/year — to run my car.
* Fuel: $1,646.37 ($0.0812 per mile)
* Insurance: $762.93 ($0.0376 per mile)
* Service: $507.07 ($0.0250 per mile)

If your fuel cost is 1,646.37 10% more is an additional 164.63 you say $725?

If your currently paying $2.00 and the price goes 3.00 per gallon. That would be a 50% increase in fuel cost per year or $823

]]> By: RossABQ http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-141097 RossABQ Tue, 22 Jul 2008 01:13:00 +0000 http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-141097 I've tracked all of my cars to answer the question of true cost of ownership, comparing relatively new cars vs sub-$1,000 cars with high mileage. I do all my repairs myself, and I might add, I make all repairs required (people who swear they haven't put in a penny's worth of maintenance are rolling the dice, with their safety and the longevity of the car. The most cost effective cars (at the gas prices in effect when I owned them) were the perennial bad-boys, rear-wheel drive V8 American cars, purchased with about 50-60k miles. Parts are cheap when needed, value doesn't change significantly from purchase to sale, and frankly I enjoyed them much more than econo-boxes. Now that gas has goine up, they are not likely to still be lowest, but likewise their purchase prices have plummeted. The absolute worst cars? VW and BMW. Mediocre gas mileage, sky-high parts prices, and extremely poor reliability. I’ve tracked all of my cars to answer the question of true cost of ownership, comparing relatively new cars vs sub-$1,000 cars with high mileage. I do all my repairs myself, and I might add, I make all repairs required (people who swear they haven’t put in a penny’s worth of maintenance are rolling the dice, with their safety and the longevity of the car.

The most cost effective cars (at the gas prices in effect when I owned them) were the perennial bad-boys, rear-wheel drive V8 American cars, purchased with about 50-60k miles. Parts are cheap when needed, value doesn’t change significantly from purchase to sale, and frankly I enjoyed them much more than econo-boxes. Now that gas has goine up, they are not likely to still be lowest, but likewise their purchase prices have plummeted.

The absolute worst cars? VW and BMW. Mediocre gas mileage, sky-high parts prices, and extremely poor reliability.

]]> By: Tpr76 http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-131270 Tpr76 Wed, 07 May 2008 23:01:32 +0000 http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-131270 Great article! Ive never done the math on the cost of car ownership but my ex-GF (whom Im still good friends with) found out the hard way how costs go up sharply once you move from a budget car to a luxury brand. After going from an econocar to a BMW 3-Series her maintenance, insurance, and fuel cost increased exponentially but because she loves it so much she refuses to get rid of it. I'm very very fortunate in having a work car that I get to drive for personal use. No fuel, insurance, or maintanence costs and I even get free car washes! I cant even imagine how much money this saves me a year but I certainly appreciate it. Once I got the work car I sold my Mazda and I havent owned a car for the past 3 years. :D Great article!

Ive never done the math on the cost of car ownership but my ex-GF (whom Im still good friends with) found out the hard way how costs go up sharply once you move from a budget car to a luxury brand. After going from an econocar to a BMW 3-Series her maintenance, insurance, and fuel cost increased exponentially but because she loves it so much she refuses to get rid of it.

I’m very very fortunate in having a work car that I get to drive for personal use. No fuel, insurance, or maintanence costs and I even get free car washes! I cant even imagine how much money this saves me a year but I certainly appreciate it. Once I got the work car I sold my Mazda and I havent owned a car for the past 3 years. :D

]]> By: Kate Kamper http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-125607 Kate Kamper Mon, 31 Mar 2008 21:47:58 +0000 http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-125607 Worried about resale, don't sell it, drive the wheels off, and worried about finance charges, don't finance it, buy it out right, there are many things you can do to drop these prices significantly.Our 2000 Dodge stratus costs us less every day, its been paid off for years, the insurance is liablilty only and even that goes down every 6 months. The very thought of replacing it when the wheels still move is just unthinkable, even with all he scratches dings and dents. Yeah our neighbors are trading up fast and furiously... but we don't care. Its all but FREE! Also, I don't see a lot of commuting in here..... My ultra safe ultra expensive minivan... barely moves... thanks to car pooling and walking the kids to dance class and soccer practice. Worried about resale, don’t sell it, drive the wheels off, and worried about finance charges, don’t finance it, buy it out right, there are many things you can do to drop these prices significantly.Our 2000 Dodge stratus costs us less every day, its been paid off for years, the insurance is liablilty only and even that goes down every 6 months. The very thought of replacing it when the wheels still move is just unthinkable, even with all he scratches dings and dents. Yeah our neighbors are trading up fast and furiously… but we don’t care. Its all but FREE! Also, I don’t see a lot of commuting in here….. My ultra safe ultra expensive minivan… barely moves… thanks to car pooling and walking the kids to dance class and soccer practice.

]]> By: ruth pennoyer http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-110397 ruth pennoyer Thu, 03 Jan 2008 22:13:26 +0000 http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-110397 I do not see where the actual cost of the car spread over 5 years (60 months) is factored into these cost per mile or cost per year figures. I do see the finance charges. What am I missing? I do not see where the actual cost of the car spread over 5 years (60 months) is factored into these cost per mile or cost per year figures. I do see the finance charges.

What am I missing?

]]> By: Greg http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-109452 Greg Fri, 21 Dec 2007 13:05:45 +0000 http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-109452 Great article. The biking comment would not work for most in Texas. I drive 62 miles round trip from work in a state where the weather changes hourly on some days. Im glad that you can boast about biking it, but take the seat out of your ass and realize that this is not a possibility for all. If you want to get a low cost of operations, buy a used Corolla or Civic and drive it until it rusts away. Personally I would rather pay for the enjoyment of driving my car and for the peace of mind that my pregnant wife is driving a tank of a Tahoe. Flame on.... Oh yea, this blog is about getting rich slowly? WTH? Great article. The biking comment would not work for most in Texas. I drive 62 miles round trip from work in a state where the weather changes hourly on some days. Im glad that you can boast about biking it, but take the seat out of your ass and realize that this is not a possibility for all. If you want to get a low cost of operations, buy a used Corolla or Civic and drive it until it rusts away. Personally I would rather pay for the enjoyment of driving my car and for the peace of mind that my pregnant wife is driving a tank of a Tahoe. Flame on….

Oh yea, this blog is about getting rich slowly? WTH?

]]> By: Brad http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-108898 Brad Sun, 16 Dec 2007 20:43:39 +0000 http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-108898 Drive the car to San Fran. Your costs included fixed and variable costs but you're still paying the interest and insurance and taxes either way... A 7 year old car with 80,000 or 81,200 miles on it is worth basically the same amount. The true cost is really gas, 1/3rd the cost of an oil change, 1/30th the cost of a new set of tires and a few pennies for misc. repairs per mi. The best way to get your cost per mi. down is to drive it more miles. Drive the car to San Fran. Your costs included fixed and variable costs but you’re still paying the interest and insurance and taxes either way… A 7 year old car with 80,000 or 81,200 miles on it is worth basically the same amount. The true cost is really gas, 1/3rd the cost of an oil change, 1/30th the cost of a new set of tires and a few pennies for misc. repairs per mi. The best way to get your cost per mi. down is to drive it more miles.

]]> By: Alex http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-105870 Alex Wed, 21 Nov 2007 19:01:45 +0000 http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-105870 My previous car was an 1987 Audi 5000S Wagon, which I bought in 2006 for $875. I sold it in 2007 for $800. Taxes and liability insurance ran at about $300/year. I also had to pay about $400 during that year for repairs. It did about 17-18 mpg in the city. I drove about 300 miles in 2 weeks. I think it beat all other cars I knew in terms of cost of driving a mile. The author is missing one important thing in his/her economic analysis: the psychological cost of NOT owning a car. If people keep buying new, expensive cars even though it's expensive, it means that they value the opportunity to drive such cars more than the money they have to spend (or waste, depending on your point of view). Also, think about the point of this website. Get rich slowly? What for? What's the point of having a million dollars when I am 75? I completely sympathize with John Wagnitz. I believe that driving less and walking or biking more is a great idea, but unfortunately, that's not what most people think (especially if you're in Texas). My previous car was an 1987 Audi 5000S Wagon, which I bought in 2006 for $875. I sold it in 2007 for $800. Taxes and liability insurance ran at about $300/year. I also had to pay about $400 during that year for repairs. It did about 17-18 mpg in the city. I drove about 300 miles in 2 weeks. I think it beat all other cars I knew in terms of cost of driving a mile.

The author is missing one important thing in his/her economic analysis: the psychological cost of NOT owning a car. If people keep buying new, expensive cars even though it’s expensive, it means that they value the opportunity to drive such cars more than the money they have to spend (or waste, depending on your point of view). Also, think about the point of this website. Get rich slowly? What for? What’s the point of having a million dollars when I am 75? I completely sympathize with John Wagnitz. I believe that driving less and walking or biking more is a great idea, but unfortunately, that’s not what most people think (especially if you’re in Texas).

]]> By: walk0080 http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-98319 walk0080 Sun, 23 Sep 2007 07:18:11 +0000 http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-98319 Re: Commend #1. I think the author's car is a 2000 Ford Focus... he would be lucky to sell it for $4,500... very poor resale - I should know, I own one myself (2000 Focus ZX3). :-/ Although I have not done the calculations myself, I do keep the cost/mile in mind when using the car. If it's probably cheaper by transit, I take the bus/subway. If it's more convenient or significantly faster than transit, I drive. Re: Commend #1.
I think the author’s car is a 2000 Ford Focus… he would be lucky to sell it for $4,500… very poor resale - I should know, I own one myself (2000 Focus ZX3). :-/

Although I have not done the calculations myself, I do keep the cost/mile in mind when using the car. If it’s probably cheaper by transit, I take the bus/subway. If it’s more convenient or significantly faster than transit, I drive.

]]> By: » Biking to Work and Back JoshuaHunter.com: http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-97349 » Biking to Work and Back JoshuaHunter.com: Tue, 11 Sep 2007 01:55:42 +0000 http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-97349 [...] http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/ [...] [...] http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/ [...]

]]> By: How to Improve Your Fuel Economy: 23 Top Tips for Better Gas Mileage ? Get Rich Slowly http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-87829 How to Improve Your Fuel Economy: 23 Top Tips for Better Gas Mileage ? Get Rich Slowly Wed, 30 May 2007 12:00:46 +0000 http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-87829 [...] If not, don’t. On a ten-gallon fill-up, saving five cents a gallon only nets you fifty cents. My car costs about 36 cents per mile to operate. It doesn’t make sense for me to go a mile out of my way to find cheaper [...] [...] If not, don’t. On a ten-gallon fill-up, saving five cents a gallon only nets you fifty cents. My car costs about 36 cents per mile to operate. It doesn’t make sense for me to go a mile out of my way to find cheaper [...]

]]> By: gary miller http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-79290 gary miller Sat, 17 Feb 2007 23:29:22 +0000 http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-79290 I teach a class called Financial Independence for Women at Saddleback College in Mission Viejo, CA. Am going to recommend your excellent analysis on total car costs-this is one of those stealth cost items that can sabotage a person's financial goals . If you know of a web site or study that shows depreciation curves or table for a variety of new cars, would love to know about this, as I'm a big believer in buying after a car is about two years old to avoid the "drive off the lot" price collapse. Thanks for your excellent work! I teach a class called Financial Independence for Women at Saddleback College in Mission Viejo, CA. Am going to recommend your excellent analysis on total car costs-this is one of those stealth cost items that can sabotage a person’s financial goals . If you know of a web site or study that shows depreciation curves or table for a variety of new cars, would love to know about this, as I’m a big believer in buying after a car is about two years old to avoid the “drive off the lot” price collapse.
Thanks for your excellent work!

]]> By: Alice http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-12689 Alice Thu, 02 Nov 2006 14:55:01 +0000 http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-12689 I use my own car to make deliverys for work. I get reimbured for gas and tolls only. SHould I be getting per mile cost as well? In 2 months I've gone 2400 miles for work. How much should that be? I use my own car to make deliverys for work. I get reimbured for gas and tolls only. SHould I be getting per mile cost as well?
In 2 months I’ve gone 2400 miles for work. How much should that be?

]]> By: How To Go 2 Years Without A Car » Personal Finance - Save Money - Retirement - Financial Freedom http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-12531 How To Go 2 Years Without A Car » Personal Finance - Save Money - Retirement - Financial Freedom Wed, 01 Nov 2006 14:33:56 +0000 http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-12531 [...] JD at Get Rich Slowly has a post about calculating the cost of owning and operating a car. Related Posts: [...] [...] JD at Get Rich Slowly has a post about calculating the cost of owning and operating a car. Related Posts: [...]

]]> By: Robin http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-9577 Robin Wed, 04 Oct 2006 00:19:47 +0000 http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-9577 I've kept a spreadsheet since I bought my 99 Jeep Cherokee. Including the initial purchase price, maintenance, insurance, fuel, and taxes, I calculate the cost has been 37c per mile. I’ve kept a spreadsheet since I bought my 99 Jeep Cherokee. Including the initial purchase price, maintenance, insurance, fuel, and taxes, I calculate the cost has been 37c per mile.

]]> By: Rick http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-4786 Rick Thu, 03 Aug 2006 01:57:33 +0000 http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-4786 Watch out with your Ford Focus. At 80K miles or so they have a tendency to throw a piston. You'll need a complete rebuild. Watch out with your Ford Focus. At 80K miles or so they have a tendency to throw a piston. You’ll need a complete rebuild.

]]> By: John Wagnitz http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-550 John Wagnitz Fri, 16 Jun 2006 17:36:54 +0000 http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-550 I guess that means I can go out and by that J.P. Weigle ranndoneur bicycle I've been dreaming about for the last year. it runs about $7,00 fully loaded. You see, I caught onto the big lie that we need automobiles to survive and, other than the occasional rental car, I pay NOTHING for auto expenses. 99% of my trips are by bicycle, 1% by mass transit, I pay nothing for health clubs since I average about 170 miles per week in cycling. There are also the larger environmental and societal costs of car ownership not factored into your figures. The increased costs for housing because parking takes up valuable space, oil runoff into our lakes and streams, the occasional Exxon Valdez oil spill, foreign wars, to mention a few. Get rid of you car completely and break free of the chains of death mobile ownership! I guess that means I can go out and by that J.P. Weigle ranndoneur bicycle I’ve been dreaming about for the last year. it runs about $7,00 fully loaded.

You see, I caught onto the big lie that we need automobiles to survive and, other than the occasional rental car, I pay NOTHING for auto expenses. 99% of my trips are by bicycle, 1% by mass transit, I pay nothing for health clubs since I average about 170 miles per week in cycling.

There are also the larger environmental and societal costs of car ownership not factored into your figures. The increased costs for housing because parking takes up valuable space, oil runoff into our lakes and streams, the occasional Exxon Valdez oil spill, foreign wars, to mention a few. Get rid of you car completely and break free of the chains of death mobile ownership!

]]> By: Get Rich Slowly » How to Extend the Life of Your Car http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-452 Get Rich Slowly » How to Extend the Life of Your Car Tue, 13 Jun 2006 20:21:42 +0000 http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-452 [...] The true cost of car ownership is greater than most people suspect. But you can get more life out your vehicle, can reduce your cost per mile, by following a few simple suggestions. eHow offers twelve tips to extend the life of your car. [...] [...] The true cost of car ownership is greater than most people suspect. But you can get more life out your vehicle, can reduce your cost per mile, by following a few simple suggestions. eHow offers twelve tips to extend the life of your car. [...]

]]> By: VinTek http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-211 VinTek Sun, 04 Jun 2006 16:10:52 +0000 http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-211 While it's entirely true that if you drove only 100 miles/year, your cost/mile would be high. Most costs of ownership in a car are to some degree variable. For example, if I drove a low number of miles per year, my insurance premium would be lower. Oil changes would slow down to once every six months (or even once a year) just to rid the car of sediment. Even depreciation to some degree would slow down, as a low-mileage car is worth more than a high-mileage car. Frankly, there is a point where not owning a car and renting one when needed is a reasonable choice. A lot of people who live in NYC do that. That said, I've always felt that the best way to get full value out of any car, whether an economy car or a luxury car, it to drive it. While it’s entirely true that if you drove only 100 miles/year, your cost/mile would be high. Most costs of ownership in a car are to some degree variable. For example, if I drove a low number of miles per year, my insurance premium would be lower. Oil changes would slow down to once every six months (or even once a year) just to rid the car of sediment. Even depreciation to some degree would slow down, as a low-mileage car is worth more than a high-mileage car.

Frankly, there is a point where not owning a car and renting one when needed is a reasonable choice. A lot of people who live in NYC do that.

That said, I’ve always felt that the best way to get full value out of any car, whether an economy car or a luxury car, it to drive it.

]]> By: Peter http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-205 Peter Sun, 04 Jun 2006 11:19:11 +0000 http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-205 The other thing you're not considering is that most of your costs are fixed. The purchase price of the car, the insurance and a lot of the maintenance are the same even if it sits in the driveway all day. Fuel is really the big variable as your miles driven changes. If you only drive the car 100 miles per year, your total cost per mile would be astronomical. The other thing you’re not considering is that most of your costs are fixed. The purchase price of the car, the insurance and a lot of the maintenance are the same even if it sits in the driveway all day. Fuel is really the big variable as your miles driven changes. If you only drive the car 100 miles per year, your total cost per mile would be astronomical.

]]> By: josh_parris http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-175 josh_parris Thu, 01 Jun 2006 04:33:30 +0000 http://www.getrichslowly.org/blog/2006/05/31/the-true-cost-of-car-ownership/#comment-175 You've forgotten the resale/total loss value of your vehicle. I bet you can't sell your 5 year old Focus with 80K on the clock for $17,800, but let's say you can get $8,000 for it. That means you've lost $8,500 in depreciation, plus $1,300 in interest - $9,800 opportunity cost over 80K -> close enough to $0.12 / mile (much better than $0.2170 a mile). Of course, the older a depreciating asset like a car gets, the slower the dollar value drops, so things should only get better from here on in. You’ve forgotten the resale/total loss value of your vehicle. I bet you can’t sell your 5 year old Focus with 80K on the clock for $17,800, but let’s say you can get $8,000 for it. That means you’ve lost $8,500 in depreciation, plus $1,300 in interest - $9,800 opportunity cost over 80K -> close enough to $0.12 / mile (much better than $0.2170 a mile). Of course, the older a depreciating asset like a car gets, the slower the dollar value drops, so things should only get better from here on in.

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