As you all know, Girl Ninja and I spent the last week gallivanting around San Diego; eating at our favorite restaurants, hiking/running at our favorite spots, and catching up with some of our closest friends. It was an amazing week and a great opportunity for us to charge our batteries before heading in to the upcoming work week. One of the nights we grabbed wine with one of my close friends (and personal finance blogger) Bruce Bucks and his wife. As usual, Matt and I started talking about money, which snowballed in to a conversation about cars.
I don’t know how much gas is where you live, but in Seattle $4.10/gallon seems about normal. Girl Ninja and I spend about $200-$250 a month on gas (thank goodness for a work vehicle, that can only be used for official business). Matt and his wife spend about $450/month. I pay around $160/month for car insurance. They pay $120/month. Let’s just assume in any given year we spend about $400 on oil changes and random maintenance (filters, belts, wipers, tires, etc).
Carry all these expenses out over a twelve month time frame and Matt and I are both paying about $5,000 a year to drive our (and our spouse’s) cars. FIVE THOUSAND DOLLARS! Do you know how many California Burritos that is? ONE THOUSAND BURRITOS!
Driving freaking sucks. It sucks the money out of my wallet, and forces it in to a depreciating asset. That is no bueno.
I could drive less and probably find cheaper insurance (we have full comp/coll coverage on both vehicles), but even that wont drastically reduce our annual auto expenses. No. The only thing Girl Ninja and I can really do to ensure transportation has a minimal impact on our budget is a) don’t buy new and b) don’t finance our next vehicle. New vehicles depreciate like crazy (40% in the first four years). While taking out a loan means we will be paying the lender interest. After already allocating about $400/month to our cars, I have ZERO desire to increase that allocation much more.
I personally could not stomach a $400 car payment on top of the gas, insurance, and maintenance payments I previously mentioned. The disdain I have for debt, outweighs the joy I’d get from driving a new vehicle.
That’s just me though. I have plenty of friends that have car payments (many who read this blog in fact). They are all intelligent people and are by no means reckless when it comes to their finances. I realize that just because I don’t have an appetite for a car payment, doesn’t mean that someone else wont find them beneficial or helpful. This is the very reason I love personal finance. You do you, and I’ll do me.
So reader, How much do your transportation costs work out to each month? Break it down by line item (gas, insurance, maintenance, and payment). After adding all these numbers up, are you shocked just how expensive driving can be (I was with our $400-ish a month obligation)? Where does it fall on your balance sheet (I’m assuming probably your second largest expense after your rent/mortgage)? Do you hate car payments, find them a necessary evil to have reliable transportation, or love the ability to spread payments out over many years?
Favorite Nail from Yesterday: Awesome Dad.