Car costs

[VoltronX]

I just read an article that said the average U.S. driver pays almost 9000$ a year to own a car. Car payments + autowork/maintaince + insurance + gas...

This sounds really expensive to me... Like that often quoted 250,000$ to raise a kid...

So how much do you guys think you spend a month to own a car?

[CalStateTempe]

Good question:

For a 2013 Jetta Sport, certified used with 27000 when we got it (yes we are now parents!)

Car payments: 1800/yr
autowork/maintaince: covered by certified used car warranty.
Insurance: 450/yr
Gas: approx 100/month x 12 months = 1200

I'd say a fair estimation is we spend about 3500 per year on our one vehicle.

[VoltronX]

That's pretty good actually. I think used cars are the way to go and you don't seem to drive too much.

I always like to compare with other people, make sure I'm doing alright. Infact, If I have any character flaws (besides my raging alcoholism, according to this board*), its being a cheap bastard. I make it a hobby to see how much money I can save.

I get a car for work (a crappy clown car according to my brother)... which helps supplement my crappy salary.. so I don't have to worry about that.

My wife's car is paid for and is slightly nicer than mine..
I pay about 450$ a year for insurance and maybe 100$ a month in gas... Also there's a mandatory inspection here every 2 years... which runs around 750-1000$ depending on the state of the car....


I'm waiting to hear from some of these old geezers on here who drive nice cars.. I bet some of the car payments on here cost more than my house payment.

[Chicat]

Paid cash up front for both my cars (paying interest is for suckers), a 2009 Ford Escape and a 2012 Toyota Camry, so no car payments for us.

Gas is around $200 a month.
Insurance is $80 a month.
Maintenance is around $50 a month.

Altogether I would guess we pay about $4K a year for two cars. Not having a car payment makes a big difference.

[Longhorned]

I bought a new Honda Fit in May 2013. I paid all cash. It now has 10,000 miles on it.

With insurance, gas, maintenance I average $900 per year for everything.

If I were average and had to come up with another $8100 per year, I'd have to live on dried weeds and melted snow.

[Mr.Zebra]

Must be nice to be in the higher income brackets

[CalStateTempe]

This thread spurred a great breakfast discussion between me and the wife/family CFO, who did not agree with the premise of not paying interest.

I am keeping the computer from her, because she is itching to respond.

Her point is it depends on the price of the car and the value of allocating that lump some to other financial endeavors, if ones intention is to purchase a more expense vehicle.

[Longhorned]

This thread spurred a great breakfast discussion between me and the wife/family CFO, who did not agree with the premise of not paying interest.

I am keeping the computer from her, because she is itching to respond.

Her point is it depends on the price of the car and the value of allocating that lump some to other financial endeavors, if ones intention is to purchase a more expense vehicle.

That's definitely true. But you also have to weigh whether "other financial endeavors" becomes your wife's non-stop shoe purchases. For me, no available chunk of cash in the bank is safe. She gets $400 a month for clothes and shoes, and spends every dime of it.

[CalStateTempe]

This thread spurred a great breakfast discussion between me and the wife/family CFO, who did not agree with the premise of not paying interest.

I am keeping the computer from her, because she is itching to respond.

Her point is it depends on the price of the car and the value of allocating that lump some to other financial endeavors, if ones intention is to purchase a more expense vehicle.

That's definitely true. But you also have to weigh whether "other financial endeavors" becomes your wife's non-stop shoe purchases. For me, no available chunk of cash in the bank is safe. She gets $400 a month for clothes and shoes, and spends every dime of it.

I see your point and it may be the case for most woman, but I am lucky that my wife is tight with money. There's a reason she's the family CFO and a big reason why I have been able to extract myself from consumer debt while living off a training salary the past 5 years.

[azcat49]

There used to be an old premise that you followed,if it appreciates you buy it and if it depreciates you lease it. Of course cars do nothing but depreciate but I still bought and tend to own good cars for long miles.

My XJS has 160K on it. My Navigator 135K and I gave my daughter our old 740 which has 200K but drives like a champ.

We recently bought a new tow vehicle and I can tell you that 9K figure is reached by us.

Part of this question Though should look at if you can itimize on your taxes. If you car is used for business it becomes a great tax deduction. Even if I don't use actual cost and depreciate it I can use a statndard rate of like .55 per mile driven. At 20K business miles per year that is a hefty deduction.

If I use actual costs and deduct the insurance, car repairs and depreciation it might be more. I have my accountant do both. Of course if i do depreciate it and I decide to sell it myself, i will have to pay cap gains on that amount as I will depreciate it to zero. That is patially why I still have those cars.

[FreeSpiritCat]

There used to be an old premise that you followed,if it appreciates you buy it and if it depreciates you lease it. Of course cars do nothing but depreciate but I still bought and tend to own good cars for long miles.

My XJS has 160K on it. My Navigator 135K and I gave my daughter our old 740 which has 200K but drives like a champ.

We recently bought a new tow vehicle and I can tell you that 9K figure is reached by us.

Part of this question Though should look at if you can itimize on your taxes. If you car is used for business it becomes a great tax deduction. Even if I don't use actual cost and depreciate it I can use a statndard rate of like .55 per mile driven. At 20K business miles per year that is a hefty deduction.

If I use actual and deduct the insurance, car repairs and ddepreciation it might be more. I have my accountant do both. Of course if i do depreciate it and I decide to sell it myself, i will have to pay cap gains on that amount as I will depreciate it to zero. That is patially why I still have those cars.

Cars depreciate until they become classics. That would be 25 years old.

I bought a 98 Nissan Frontier brand new back in 97 and still own it. It has over 178,000 miles now, and still in good condition. I can't afford to buy a new one and don't trust how people maintain their cars. I don't trust mechanics either, and fixed my own truck when I could. I hate working on my vehicle. Hate it! But the cost of repair from a mechanic lets me know that my days of owning a vehicle are numbered. As an example my alternator was going out during the last month. The closest mechanic, Sun Devil Auto, wanted $516 to replace it. So I pulled it out on the street and did it myself for $130, although it took me about 5 hours. I should have changed it this last summer when I replaced the water pump, fuel filter, and all the belts. Nothing feels better than fixing your vehicle and saving a lot of money. I guess I took after my dad. The places I live sure frown on self repair though. One thing for sure, when you do self repairs and keep one vehicle for a long time you sure get to know what is going wrong but the dashboard lights and the sound. BTW I just spend over $1500 last spring fixing the emissions system. Something I am unable to repair. And today I would have just sold my truck to a salvage yard.

Now that I will be able to work to work and walk to get my groceries, I will probably spend an average of $50-60/month for all costs, including insurance. Most of the time the truck will sit there. My biggest cost is driving to Tucson to see my doctor. That Nissan truck has been the best vehicle I've ever owned as far as how it was built. It rarely breaks down. I really don't want to get rid of it, although if I could afford it I would go more economical, like a Toyota Corolla, or Honda Civic.

There used to be a place in Phoenix that allowed self repair for $20/hour and used of their lift. Plus you could rent tools, but they closed down a couple of months ago.

[gumby]

CST's wife is correct if your ROI exceeds the interest rate. Takes discipline, though. Paid cash for my Highlander Hybrid with a windfall, which allowed me max out retirement investments. Monthly car payment would've stymied that. I am not in a high income category, but I think I'm pretty smart with money. I'm amazed at the amount of debt people are able to put up with. It's just stuff, people.

Monthly gas is about $100. Short commute. Parking is $50 (an often overlooked expense). Insurance quadrupled when my teenage son got his license (or does that go in the cost of raising kids category)?

Voltron, not sure why you find that $250k figure for kids suspect. Budgeted $100k for college for two kids. May not be enough. Medical, bigger mortgage than I'd otherwise have, more furniture than I'd otherwise have, food (wait till you feed teens), clothes, toys, electronics, orthodontia, car insurance, vacations, camps, costs of the activities they join (karate, dance, sports, etc).

Damn, now I'm getting pissed. Think I'll go beat them. Oh wait, karate!

[Chicat]

This thread spurred a great breakfast discussion between me and the wife/family CFO, who did not agree with the premise of not paying interest.

I am keeping the computer from her, because she is itching to respond.

Her point is it depends on the price of the car and the value of allocating that lump some to other financial endeavors, if ones intention is to purchase a more expense vehicle.

Well, you can let her know that we are considering trading up to a larger SUV and would likely borrow some money to do that since we just made some investments that will (hopefully) earn a higher rate of return than the interest on the loan. Still likely to put a large amount down (probably up to 60% of the value of the car with our trade in) and get a 5 year loan so that our payment and interest are low because I fucking hate paying interest.

[ASUHATER!]

No car payment so but I drive a good amount. Probably $150 a month in gas and the same in insurance and maintenance.

[VoltronX]

CST's wife is correct if your ROI exceeds the interest rate. Takes discipline, though. Paid cash for my Highlander Hybrid with a windfall, which allowed me max out retirement investments. Monthly car payment would've stymied that. I am not in a high income category, but I think I'm pretty smart with money. I'm amazed at the amount of debt people are able to put up with. It's just stuff, people.

Monthly gas is about $100. Short commute. Parking is $50 (an often overlooked expense). Insurance quadrupled when my teenage son got his license (or does that go in the cost of raising kids category)?

Voltron, not sure why you find that $250k figure for kids suspect. Budgeted $100k for college for two kids. May not be enough. Medical, bigger mortgage than I'd otherwise have, more furniture than I'd otherwise have, food (wait till you feed teens), clothes, toys, electronics, orthodontia, car insurance, vacations, camps, costs of the activities they join (karate, dance, sports, etc).

Damn, now I'm getting pissed. Think I'll go beat them. Oh wait, karate!

The 250,000$ doesn't include college.. its just up to age 18.

I also think they budget things like housing/transportation strangely.. One chart I saw had 5000$ budgeted for that in the first year of life..

As for the ROI, I think its probably a wild market out there for car financing... It might make sense for some people to pay it all off at once and others to pay it off slowly..

For my situation.. I would rather pay it all off straight up and eliminate 3% interest (or whatever you can get ) vs playing stocks at a long run of 8%-10%..

Bonds are gonna pop... Savings accounts are almost worthless... so unless you got some kind of retirement scheme going on.. Tax reasons, matching deductions...

But everyones circumstances are different..

[CalStateTempe]

Our interest rate on the car is insanely low. 0.9%

Love our Credit Union. Cue Scumdevils...

[gumby]

Rough retirement savings guide (to live in retirement as well as now).

Age

40 -- 7 times annual income
45 -- 8 times
50 -- 9
60 -- 10
65 -- 11

I'm in the ballpark. Doesn't count SS and pension.