I overheard one of my colleagues mention last week that she ‘really
would love to buy a car’. She hates walking,
waiting for the bus to around is a pain, and her hair is always messed up by her
hat in cold weather.
Ho-hum. I still hate
my car…and I told her that.
Why? Because it takes money out of my pocket. Some people list their vehicles as an ‘asset’,
but if you are a follower of Robert Kiyosaki (author of Rich Dad, Poor Dad),
you might be inclined to think of it as a liability. Let me explain….
I have a very accurate picture of how much a vehicle costs
as I save every receipt for business purposes so here is my breakdown in
expenses for 2012: (note, this is based on driving almost 40,000KM last year,
which I realize is above average)
Car Payment: $0…..(it
is a 13 year-old car….no payment here!)
Insurance: $1390…(this is actually low as I qualify for a
good discount based on my rental properties being with the same company)
Routine Maintenance: $2020…(oil changes, coolant flushes,
tire changes, general issues)
Non-routine Maintenance: $1600…($1200 for a brake-job and
ABS sensor, $400 to repair a bumper from a hit and run event in a parking lot)
Miscellaneous: $400..(CAA membership, registration fees,
safety + emissions test)
Gas: $3800…(again, I drove 40,000KM)
GRAND TOTAL: $9210
Remember, this is WITHOUT a car payment. I also did not include any depreciation, of
which I have very little due to my car being 13 years old, but everyone knows
that cars depreciate at blinding speed.
Throw in a $300 per-month car payment (which is low) and this number
jumps to $12,810.
Don’t get me wrong, I hope to never sell my car. I need it for work and business purposes….and like my colleague, I don’t know
if I could stand waiting in the cold at a bus stop! OK, so maybe I don’t ‘hate’ my car like I
mentioned above…I just hate that it takes money out of my pocket.
So what I do hope to accomplish with this post? At least get people thinking about the TRUE
cost of car ownership…don’t just look at that advertisement for a nice car at
only “$149 bi-weekly”…..what they don’t tell you is that it is bi-weekly
payments for the better part of a decade..
And who knows, maybe
you can live without a car for 4 years and have $40,000 in your pocket
to invest in some cash flowing real estate!
Andrew I hate to say it but I find your expenses high compared to what they could be if you shopped around. A vehicle that is 13 years old should run you know where near 1390$ for insurance. Costco offers much cheaper version of CAA when you have a vehicle thats I believe 5 years or newer. Check out the Costco tire centre for cheaper oil changes or do it yourself for a bit less. Your gas mileage could be greatly reduced with a new vehicle. Getting your hands dirty and doing your own brakes could get rid of that 1200$ sometimes there are bonus's of a new"er" vehicle.
ReplyDeleteHi there, thanks for your comment! I will try to clarify why you might see some of the costs as being high.
DeleteThe reason my insurance is that high is that I have full collision insurance. Without that full collision, it would only be about $900.
Also, I use full synthetic oil in my car. This is a personal preference that ads about $20 to an oil change...I used to do my own oil changes, but it is just not worth my time anymore.
You're right that my gas milage could be reduced with a new car, but my car gets about 9L/100KM. Even if I reduced it to 6L/100KM, my gas bill would only be reduced by about $1200 on an annual basis. To make my money back on a new car would take quite a bit of time.
As for the brakes, I wouldn't trust myself to do something like that! :)
What I have learned is a less-expensive car can cost you more in the long run than a more-expensive alternative.
ReplyDelete