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The Real Cost of Owning a car- More data here, as first posted in the Greenville section:
Quote:
Originally Posted by jamiecta
2) spending $8-10k per year is a crazy amount on a car though...
Where are you pulling these numbers from? Or maybe you are assuming the first year cost if you had to buy a car to live here? While you certainly COULD spend that much on a car, you can easily spend much MUCH less than that. My wife and I each have a car. We carpool to work each day (16 mile round-trip) and limit the driving as much as we can, but we enjoy driving around to hunt for vintage furniture, visiting out of town friends, and playing rec sports and a few other things that having a car is useful for. Our total for all of 2012 for BOTH cars was right around $2200 with taxes, insurance, gasoline, oil changes, etc.
So, while Greenville is not a great city to go completely without a car, you certainly don't have to spend a ton each year to own a car.
Okay.
I admit that I do not recall EXACTLY where that figure came from, but I believe that the figure was USD 8,000-9,000 per annum was the "average fully-loaded cost" of running a car for the average American, as reported on a recent Strong Towns.org podcast.
Many people do not fully-load the costs of car-owning. And even worse, some of the costs of car owning are passed on to others, through the way we finance our highways - They are subsidized by the Federal government, so non-driver are now paying for some of the costs of car owning. I wonder how much longer that cross-subsidy will continue?
Let me try to confirm my figure, by pulling some figures off the web...
This is a little out-of-date, by the 2006 figure from the US government was a little bit over $8,000 per annum:
"Government Estimates
According to Consumer Expenditures in 2006, released in February of 2008 by the U.S. Department of Labor's U.S. Bureau of Labor Statistics, the average vehicle costs $8,003 per year to own and operate. The breakdown of the figure comes to $3,421 for purchasing the vehicle, $2,227 in gasoline and motor oil expenses, and $2,355 in other vehicle-related costs."
Obviously, the higher income people have, the more they are willing to spend on their cars. I reckon that gasoline prices today are near where they were (on average) during 2006, and maybe a bit lower than they were in 2007-8, when oil prices peaked. People are driving less, but other costs like new car purchase prices, and insurance costs may be higher today.
Maybe someone who is better at doing web research that I can get a more up-to-date figure.
As for the Cross-subsidies, that non-drivers (like me) make to the Car-dependent, Chuck Marohn talks about this in his latest Strong Towns podcast:
Basically, highways are VERY expensive to maintain, and most states are not getting anything like enough money to cover the costs from gasoline taxes. (For instance, North Carolina will need an extra $22 Billion over the next 30 years to fund its highway-related costs*, says Marohn.) So the shortfalls from gasoline tax are now getting funded through new bond issues, and through the state sales tax. If ALL of the costs of maintaining the highways were put into gasoline taxes, then the price of gasoline would go up by $2-3 per gallon.
This is tolerated politically because so many people drive, and the car-dependent are able to use the political process down the throats of the Carfree - although this is patently unfair. The problem now is that highway maintenance costs are rising much faster than revenues from the gasoline tax, and so it is getting harder and harder to fund these costs through cross subsidies.
Marohn quotes those who are talking openly about abandoning some old highways, raising gasoline taxes, and charging drivers for driving on a per mile. However you look at the real data, it should be crystal clear that the costs of driving are likely to rise and rise. I want to avoid that cash drain, if I can, by living carfree. It makes logical sense in my view of the world - I hate to be a sitting duck for future tax increases.
Wow ! Lotta money spent on . . . . nothing.
Think what having 4k of that back might do for your household or retirement fund every year for 20 years or so?
Wow ! Lotta money spent on . . . . nothing.
Think what having 4k of that back might do for your household or retirement fund every year for 20 years or so?
Exactly.
Spend $8K a year on paying down a mortgage, and you build real wealth.
And that builds flexibility. That's exactly what I have been doing for decades, and now do not need a job. I am a self-employed "investor." So I can say: IT WORKS !
While I enjoy owning and operating my own car, I definitely can see the appeal of using mass transit and walking/bicycling around town to save money and keep an active lifestyle. It seems that the area is not the friendliest for pedestrians. Sidewalks and shoulders are not the most common features in my neck of the woods.
I can see this number being reached quite easily for a single vehicle, even with a practical family car. Let's look at a hypothetical purchase:
$23000 financed 60 mos. (ie a $30,000 popular mid to large size family vehicle after down payment):
$400 loan payment x 12 = $4800
$200 gas x 12 = $2400
$100 insurance x 12 = $1200
$450 property tax x 1 = $450
$75 dealer oil change and tire rotation x 4 = $300
$tire replacement
$winter tires
$brakes
$scheduled maintenance
$car washes
$depreciation
$parking
etc
That easily adds up to $9,000 per year for the 5 first years of ownership. This is just a hypothetical cost breakdown of a normal car based loosely on my own vehicles. My wife and I keep a car around 7 years, I do all of my own maintenance, pay insurance premiums in full, pay off loans within 1-2 years, etc to keep our cost of ownership down. Of course, if you buy a used, reliable small car it would be significantly cheaper. Even if you wanted to escape Greenville for the mountains or beach, rental car agencies often have great weekend rates and you could rent a nice car for $20-$30 if the need arises.
I wish you both the best in luck in defending your claims here. It will not be an easy road. :-D
???
what are you speaking about. I am merely repeating government statistics, not making any outlandish claims.
It is what it is. Do you disagree? As I have posted on the Greenville thread...
Quote:
Originally Posted by jamiecta
While you may be able to pull some average figures for lots of things on the internet, I'm very organized when it comes to our finances and I am always tracking our trends and budgets. That's how I was able to provide you that factor for our car expenses last year. So while $8000 per year per car might be some sort of national average, ~$2200 was what my wife and I spent for two cars here last year...
Did you follow the link? Perhaps not.
Clearly, some drive for less, and it is usually (but not always) linked to incomes.
Here's how they driving costs were broken down amongst five income groups:
Those figures are based on financing a car at G*d knows what %, and keeping a car no more than a few years for starts.
Evidence for that? The OP's link appears to be from a survey of households from the Bureau of Labor Statistics. But I can't get to the original source.
From's the OP's link the sentence before the table:
An overview of vehicle expenses based on household income is provided in figure 1 below.
Is this per vehicle or vehicle expenses per household? The numbers for the lower incomes of the table sound reasonable, but the highest 20% the purchase costs come out to $620 / month. It's hard to figure out down payments but it appears you can lease a BMW for less than that.
Evidence for that? The OP's link appears to be from a survey of households from the Bureau of Labor Statistics. But I can't get to the original source.
I guess I should have said "in general" these are the assumptions. They are the assumptions in any car-ownership article I have ever read.
Add: Here is something from the OP's link, "The True Cost of Owning a Car":
Statistics From the American Automobile Association
The American Automobile Association (AAA) also compiles statistics on the cost of driving, and has been doing so since 1950. In its 2007 Your Driving Costs survey, it summarizes the cost of gasoline, maintenance, insurance, license and registration, loan finance charges and depreciation costs for a variety of vehicles. That data is summarized figure 2 below. (For related reading, see Shopping For Car Insurance.)
Depreciation is usually figured on the basis of owning a car five years, the length of the average loan.
I will note that gasoline costs vary based on how much you drive the car. Someone with a 4 1/2 mile commute like me, who otherwise uses their car to drive around town running errands, does not spend as much on gas as someone with a long commute who likes to go to the mountains every weekend to ski/camp. Maintenance seems to assume paying someone to change oil, etc that some do on their own. Insurance varies a lot with age of car and age of driver, miles driven, etc.
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