The Real Cost of Car Ownership

One year and seven days ago, I bought my third car: a cranberry 2002 Saturn SL2. This is my second Saturn SL2 and I love it.

1998 Saturn in 2016

My first Saturn SL2 was a 1998, starting to rust a bit underneath and had 150,000 miles on, so although I could have kept it longer, I decided to sell it for something instead of driving it into the ground and getting nothing for it. I paid $1,000 for that car in June of 2016 and made no mechanical improvements or replacements other than buying a set of snow tires and rims that I still have. I drove that car to Boston, Toronto, Detroit, Buffalo, back and forth to college, etc. – about 20,000 miles in two years.

2005 Subaru Legacy in 2018

In the summer of 2018, I bought a 2005 Subaru Legacy wagon with 177,000 miles on it (and other looming issues I didn’t know about) from the original owner, sold the first Saturn for $900, bought the second Saturn for $900, and sold the Subaru for as much as I paid for it plus the couple things my Dad and I fixed on it.

Effectively, I drove my first car for two years for only the price of gas, oil, insurance, title and registration. At the time, I didn’t track how much that was, but I figured it must have been pennies per mile.

With that in mind when I bought my second Saturn, I vowed to track every penny that I put into so that I could answer the question: how much does a car really cost to own?

Here is what I found after one full year and seven days:

My answer: $3,165.65 in total, 38 cents per mile, $8.56 per day, or $254.66 per month. Not bad, right? Or is it

Lets acknowledge a few facts up front here. First, few people pay as much for a “new car” as they sold their old car for, and of those who do, I imagine very few do so for a car that is four years newer, has one third the miles, and is in much better condition overall. Second, I missed a couple data points in July after I got back from my trip so my average MPG only goes up to May 30th (although I didn’t drive my car at all during the month of June because I was away). Third, I have been the beneficiary of some charity regarding my car expenses, including my father paying for a new battery and my most recent inspection at the end of July. I also must disclose that he and I did all the initial repair work on the vehicle and that so far, I have changed the oil myself – most people would pay to have someone else do those tasks. Fourth, I have spent at least $9 on Buffalo metro tickets since July which take the place of trips that otherwise may have been made in my car.

Every vehicle and driver will have their own expenses and savings; however, no matter your individual circumstance, having this kind of data is quite eye opening and can help make other financial and transportation decisions.

How much would $3,165.65 get you in NFTA metro fare? The monthly pass costs $75, or $2.50 per day for unlimited travel on the light rail system. The cost of my car could buy 42 months of metro passes – thats 3.5 years! To be fair, the light rail system is quite limited in Buffalo and could never take me home to Florence or the many other places I drive to.

But lets consider that instead of owning a car, I only biked or rode a bike which costs maybe $1 per month on average for tubes, etc. and that instead of applying that $3,165.65 to transportation, instead it went towards housing. For example, my “$900 car” actually costs as much as three months of rent in a respectable Buffalo apartment (at $800/month plus utilities).

Here’s the real eye opener: the Federal Housing Administration (FHA) allows a minimum down payment on a qualifying home purchase of only 3.5%. For the same amount I paid to own my car over a year, I would be only $334.35 away (not including closing costs) from having enough to buy a $100,000 house (which is getting harder in Buffalo, but still possible)! The even better part – the FHA allows borrowers to purchase up to 4 unit properties and mixed use buildings as long as it is 51% or more residential!

The savvy individual could opt to not own a car for a couple years, instead buy a duplex that generates enough in rent to cover the mortgage and reduce their monthly expense by hundreds of dollars per month in comparison to me owning this car and paying rent, if not generate a positive cashflow. If, they prioritize differently than many Americans.

For now my transportation system looks like this (June 2019)

Is my car really worth that much to me? I’m not sure anymore. There is no question of the convenience offered by the personal automobile due to the infrastructure dedicated to it here in the United States. And there are few vehicles that cost as little as my car does, meaning many Americans pay more than I do to own their cars.

The only way anyone can answer that question is to start by tracking your transportation expenses like I did and evaluating their life choices from a holistic and financial perspective. Give it a try and let me know what you find; I’ll even give you my spreadsheet to track your vehicle expenses.

Remember: this isn’t financial advice. Do your own research and make your decisions based on that, not just what I wrote.

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