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Counting depreciation as a "cost" is double counting. You're not supposed to be getting your car for free. If a car costs $20k after negotiations, you can either pay that all up front, finance it with monthly payments and pay a lot more in the long run, or lease it. Those are your real costs of ownership. $20k over the lifespan of the car, or $25k if you paid monthly and didn't have a particularly good deal, or a much smaller lease for a shorter time if you had a pretty good idea of how long you actually wanted to have that particular car available to you. If you're smart, you drive your car for as long as you can, amortizing the cost of the car over a longer lifespan. Even if the car completely died and became worthless in 5 years, and you paid through the nose for it monthly, that's $5k base per year not $9k. Plus it's absurd, you should be holding on more like 10 years. That's $2.5k base per year, nowhere near $9k.
Trying to be some kind of amateur car dealer and turn a profit on selling and buying cars, isn't real cost. It's just a foolish way to be in business "for yourself". People shouldn't be trying to flip cars unless they know what they're doing and can get profit from that. Like someone who knows auto repair or body work might buy something that someone thought would be too much hassle to fix. Do the work, then sell it, making a profit. Most people when they sell and buy cars are not doing it for profit, they're doing it for status. They take a bath and they're not to be pitied for that. Then AAA tries to tell us that such people are relevant to the cost of owning and maintaining a car. They aren't.
A working car for $100 is extremely profitable. It just looks like crap. I've probably put $3k parts into it by now, 7 years later. That includes replaceables like tires, and might even include all the tools I bought to do the work, I've lost track. The real loss is the incredible amount of labor hours I put in to learn those skills. If I got to count those in computer consultant math, it would easily be a $20k+ car and could be declared economically irrational. But I wanted to have the skill and didn't want to do the computer programming. Yes it's a lot of sunk labor cost, but now I'm immune to minor repair costs. It would take the engine or transmission blowing up or the drive axle snapping for me to junk it, and this old bird seems to be pretty tough. Even the carburetor I've rebuilt, it didn't turn out to be that hard.
Let's put it another way: if it really cost $9k/year to run a car, you should either keep at your high paying job that easily lets you afford such wasteful things, or spend that money on tuition at a trade school. $750/mo is a lot higher than most people's realities. In a lot of places in the country, people don't even pay that much for rent.
I don't think the cost is talking about what people 'should' do, just what they actually do. I am guessing from looking around that a lot of people have 5 year loans for $25k cars. With $5k down, that is 450/month or so, which is $5,400/yr. 15k miles per year at 25 mpg and $3.5 per gal is just about $2,100. Insurance is probably $600 or $700? Anyway, up over $7000 total. Then the misc. expenses of oil change, tires, maintenance, registration, tolls, etc. could probably get you up to $9,000/year.
The part that is off to me, is that most of the people I know pay off their car and keep it for a while. The average cost starts coming down quick once you pay it off. OTOH, I work with a bunch of engineers that are pretty damn pragmatic about cars. If I was to go down the list of cars that my co-workers drive, I would guess the average age is probably is 5 or 6 years, with several at 10+ years. I almost guarantee all the engineers go through the full cost analysis before buying a car, they just can't help themselves .
As for me - I drive about 3,500 mi/yr in my car, but it does take premium gas and gets about 22 mpg (real world, not sticker), so that is about $600/yr in gas. It has been paid for for a year now, give or take. I generally take it in for an oil change, since it is hard to rationalize having oil change stuff and remembering the details for a once per year event. Say $50. That is the only maintenance it has needed in the four years I have had it...maybe I got new blades at one time? A couple of air filters, too. Anyway, even with the impending increase in costs (new tires, belts, fluids) in the near future, it is still WAY below $9000 per year. Now, to be fair, we do the 'weekend' and long-trip driving in my wife's car, but it is still only about 10k miles per year and uses cheaper gas. Her mileage is partially offset by her 2.5 mile commute, where mine is the long one at 6 miles .
So if I'm reading this thread correctly the real reason that salaries are low in Austin is somehow tied to people foolishly purchasing status cars and losing money on them and therefore driving salaries down because they have less money to spend around town.
Or is all the people who are keeping their cars longer and therefore reducing the need to manufacture new cars therefore causing the auto manufacturers to reduce the workforce driving salaries down resulting in less money to be spent by fewer workers.
Location: Central Bay Area, CA as of Jan 2010...but still a proud Texan from Houston!
7,484 posts, read 10,444,054 times
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Quote:
Originally Posted by Chris1917
Hello,
I'd really like to move to Austin, but all my research has been very disheartening. It seems like almost every field pays so much less than the national average and with the ever increasing cost of living here, I just don't feel like it's really doable. How do people make it here? Salaries tend to be at least $ 10,000 more for the same job, both in Houston and in Atlanta, than they are in Austin---according to things I've found online searching for average salaries for various occupations in each city--I've searched paralegal, it help desk, GIS analyst, business analyst, etc. etc. Is this really the case? Also, are there certain fields that have don't follow the trend, or is this just across the board? I'd love some insight on this.
Thanks!
Yes it was one of the most disappointing things when I choose to move to Austin when my partner took a job with Dell. I took a solid 10K pay cut to do the same job I had in Houston. I am in the medical profession so this was not an entry level job.
I have read so many posts where people think the reason is due to all the people wanting to move to Austin. I don't think this is the reason at all. I now live in CA where my profession is the highest paid than any other state. There are tons of people wanting to move here as well and yet this place pays some of the highest salaries in the nation.
The point about cars wasn't really about Austin, but NYC:
Quote:
Originally Posted by LiveUrban
Cost of living in subjective. Housing and consumer prices are higher in NYC but you don't need to own a car there for example. A car a huge expense.. average American spends around 9,000$ a year to own, maintain, license, and fuel their cars
I don't agree that the median cost of owning a car is likely anywhere near that high. I think AAA did its math wrong, trying to count depreciation over an unreasonably short period of ownership. The cost of NYC isn't subjective, it's objectively more expensive than lots of places. Not needing a car probably doesn't make up for it.
Bankrate did a survey of what it costs to operate a car in all 50 states. Paying for the car itself, and depreciation, are not included. The average cost is $3,201/year. That passes my personal smell test: I think I only put in $1.5k/year, but I do my own repairs, minimize the number of miles driven by walking, and live in a state with modest insurance premiums (NC). So I'm paying about half the average, and ownership for me is a non-issue. I paid little for it up front, own it outright, and probably have only put $2.5k of parts into the car. Which if I wanted to count depreciation are now worth $0 as nobody's gonna pay me squat for a rusty but reliable 29 year old car. But as I said, I don't believe in counting depreciation the way AAA did. That's funny money math. Getting rid of your car before you extract much economic value from it is a (foolish) personal choice.
Last edited by bvanevery; 11-25-2013 at 09:57 AM..
I agree that paying for the car itself shouldn't be included, however some form of depreciation or amortization should be included, perhaps a base rate to get some kind of average number and then gas, insurance, car repairs and maintenance. Also $9k is ridiculous as an annual figure. $3000 - $4,000 seems more reasonable. Hubby and I both drive mid sized sedans -,2 year old and 6 years that we plan to keep for as long as they go. We both drive less than 5,000 miles a year and pay about $1400 in insurance for both cars for the year and about $1,600 in gas for both cars per year and that's with gas frequently over $4/gallon in our area. For the 2 year old. Was under warranty so haven't paid anything to date for the quarterly oil change etc but have budgeted $1,000 a year for maintenance for that car and perhaps $1,500 / year for the older car and most years haven't used it all. Based on this back of the envelope calculation, we are ranging $2,500 to $3,000 a year per car.
And cost of living is very very objective. The cost of a basket of goods is a very objective measure. Having lived in quite a few very expensive cities across the globe, for me it's about the limited availability of cheaper options for what you need or want I.e if all the 1 bedroom apartments in a particular all have a starting rent of x, vs another city that may have all the posh apartments in say downtown area all rent for x but lots of other area in the same city rent same apartment for y (y being < x) just a wee bit less convenient to commute then clearly city a is on a simplified view more expensive than city b.
. Getting rid of your car before you extract much economic value from it is a (foolish) personal choice.
How much is enough 'economic value' to satisfy you? You've yanked this thread seriously off-topic with your three decade old vehicle. You're going to tell me it's as safe as my two year-old Volvo? You really think I should send my wife out into the Texas hill country when it's 105 degrees in a vehicle like yours? Foolish? It's my money, dude. My very clean running Volvo(Super LEV or whatever it's called) is worth every penny of the >$9000/ year it costs to drive....not to mention the countless hours of enjoyment we get from it when we can put the top down and actually enjoy driving instead of wondering if our vehicle could even pass an emissions test. Foolish, indeed. Good thing you were right about the 'personal choice' part. Yeesh!
I took a solid 10K pay cut to do the same job I had in Houston. I am in the
medical profession so this was not an entry level job.
As much as I would like to work in Austin or even the surrounding suburbs as a teacher, I cannot because the salaries there are about $3000 per year lower than San Antonio and about $5000 per year lower than some of the Houston areas. And I am not an entry level teacher by the way.
The University provides several thousand qualified employees every year who are looking to stay in Austin due to its quality of life. Many areas in the Rocky Mountains have the same issue, lower pay but 'higher QOL'. Want more money, go to El Paso, Corpus or Houston where there is more competition and more jobs.
Hello,
I'd really like to move to Austin, but all my research has been very disheartening. It seems like almost every field pays so much less than the national average and with the ever increasing cost of living here, I just don't feel like it's really doable. How do people make it here? Salaries tend to be at least $ 10,000 more for the same job, both in Houston and in Atlanta, than they are in Austin---according to things I've found online searching for average salaries for various occupations in each city--I've searched paralegal, it help desk, GIS analyst, business analyst, etc. etc. Is this really the case? Also, are there certain fields that have don't follow the trend, or is this just across the board? I'd love some insight on this.
Thanks!
I know this post is old but this post is still relevant today. 3 years later and it is still the same. My bf and I have constantly run into this and the pay is so low here vs the cost of living that no one seems to really enjoy it here my co-workers say that it is just horrible and they just don't like what Austin has become, plus there seems to be no relief in site. When our lease is up we are expecting our rent to go up by $200-300 dollars a month, no one can afford that, and of course the City or the State won't step in to stop this obvious price gouging. So that means we will be paying 1.3k-1.4k a month for an apartment that clearly isn't worth it.
I would advise any one thinking of moving to Austin to just not do it, unless you are a seasoned veteran in your field and even then you may still be taking a pay cut.
Plus not only that where we live it seems like we live in the ghetto. We won't go to the Walmart or the HEB where we live they are both really sketchy places to go in.
In conclusion we both plan on moving away from Austin, because of the low pay and the high cost of living. We just don't have a high quality of life here and we wish we would've seen this post over a year ago, it probably would have prevented us from moving here.
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