Give Me Back My Five Bucks

How much is your car costing you?

I’ve owned a car for most of the 6 years I’ve lived in the Vancouver area, and it makes up a significant portion of my monthly budget.

Car expenses represent approximately 11% ($275-300) of my monthly spending (or 5% of my approximate gross monthly income) – and that’s just for gas and insurance. These are just my regular monthly expenses, and doesn’t take into consideration oil changes, repairs, wear and tear on my vehicle, or the actual cost of buying my car (obviously). Thankfully, my car is new enough that it hasn’t needed any repairs, but I know it’s only a matter of time until something needs fixing.

So what does that $300 get me each month? Let’s break it down (along with my reasoning):

  1. A shorter commute to work. Taking transit would take anywhere from 2.5 to 3 hours roundtrip. My commute by car takes 35-40 minutes each way.
  2. Access to the things that I love doing. Everything that I love to do in my spare time requires a car, and I do these things almost every day of the week – which is why renting a car or belonging to a car co-op isn’t that great of an answer.
  3. Transit is expensive. A full transit pass for Metro Vancouver costs $170. That’s approximately how much I pay for gas each month.

These are all somewhat valid reasons for owning a car. It’s worth it to me right now, because my car hasn’t needed a lot of maintenance. But will it be worth it in the future? I don’t know. I purchased this car new back in 2009, and the only other car I’ve ever owned always had something wrong with it – so it’s hard to say.

Here are my rebuttals to my own above-reasoning:

A shorter commute to work

  • I could move closer to work. This is a pretty extreme option, but there are definite downsides to living in the suburbs. And truthfully, I’ve thought about moving into the city of Vancouver on more than one occasion. It just hasn’t gotten to that point yet. And I really, really love where I’m living right now.
  • I could find a job closer to home. Not surprisingly, there aren’t many marketing jobs in the city that I live in, but it’s always worth investigating.
  • I could bicycle to work. There are no female shower facilities at my office. But, if I pushed hard enough, wouldn’t they have to provide something? That being said, I’m mostly concerned with the 50km roundtrip commute on very busy roads and bridges. Not that I couldn’t do it physically, but it would likely affect my running. Could I (or would I) really bike 25km in the morning, run 1-2 hours after work, and then bike 25km home? And what if I wanted to go out after work? I’d be all sweaty

Access to the things that I love doing

  • I could find alternate ways to have fun. Playing field hockey 3-4x/week is fun, but excessive and kind of expensive. Especially since the practice field isn’t located near transit (and twice a week, I go to practice straight from work – so no car pooling available). Plus games are spread across a very large area. If I wanted to quit the car, I’d likely have to quit field hockey too. But running is free, and there’s a great 20+km running trail just steps from my office that I’ve been using multiple times a week over the past few months.
  • Hiking could be done with a rental car. True. I bought my AWD car so I could have access to the mountains and ski hills. But really, I only do that once a month – maybe twice in the summertime. I think it would be cheaper to rent a car for those specific times.

Transit is expensive

  • I would save on the wear and tear of my vehicle. By taking transit, I will be prolonging the life of my car. This makes me happy, and it’s actually something I’ve really wanted to do. I love this car – it’s perfect for me.
  • Transit is a green solution. It’s obviously better on the environment if I leave my car at home.
  • I could buy a one-zone pass. It doesn’t really make sense to buy a one-zone pass, since I would need access to all three zones. But maybe it would be cheaper to buy a one-zone pass ($91/month), and then just add on additional fare when I need to cross to other zones. Otherwise a full-zone pass costs $170/month. Which is ridiculous.

I guess the point of this post is that I can justify having my car as a “need” all I want, but based on my own arguments, it’s obvious that a car is a “want.” My car definitely fits in nicely with the lifestyle that I want to live right now, but is it absolutely necessary? Of course not. Who knows if my thoughts on owning a car will change in the future, but I’m actually pleased (and a little surprised) with how easy it was for me to come up with solutions to get away from owning a car. Some of them are pretty extreme (like selling my house, quitting field hockey, or finding a new job), but all options have to be considered whenever you’re dealing with money.

Having an extra $300/month would be nice. But considering a bus pass would eat up half of that savings, I’d be losing many hours commuting by transit, and I’d be forced to quit a lot of the fun things in my life, I’m okay with the cost for now. But just barely.

How much is your car costing you – and could you live car-free if you had to?

Author: Krystal Yee

I’m a personal finance blogger and marketing professional based in Vancouver. I’m a former Toronto Star (Moneyville) columnist, author of The Beginner’s Guide to Saving and Investing, and co-founder of the Canadian Personal Finance Conference. When I’m not working, you can usually find me running, climbing, playing field hockey, or plotting my next adventure.


Comments

  1. Well, I was wondering about your predicament and thought, if you cycled all the way instead of driving, wouldn’t the physical benefits equal that of running? You wouldn’t have to run then because you’re already doing cardio…

    • Krystal Yee says:

      It seems like a pretty miserable life if I had to quit field hockey AND running – the two loves of my life. :)

      That being said, you’re right. If it came down to it, of course I would quit running. And cycling would make sure i stay in shape. I just love running, so definitely hope I never have to make that sort of decision!

  2. Liquid says:

    That’s the same reason I drive. It would be nice to save some money but the cost of transit is quite expensive in Metro Vancouver. Maybe they can do some cost cutting after the new compass cards are implemented but I’m not getting my hopes up.

    It used to take me half an hour to drive to work but then I moved closer to my job and now only take 15 minutes each way :D Biking would probably take 25 minutes but I’ve never tried because I’m lazy, lol. I think I could still get by without a car but since it costs me $130 a month to currently own a car, including insurance + maintenance, I think it’s totally worth it for the convenience. Plus I have a deal with some oil companies that pay for most of my driving cost.

  3. Kara says:

    I remember figuring out one time that it costs me about $350 a month to keep my car. That includes: fuel, maintenance, registration, and insurance. I own my car outright, so that doesn’t include a car payment. Of course that was when I was working from an office about 18 miles away, so I was having to fill up my car about once a week. Now that I work from home all the time, my gas costs have dropped to a fraction of that, so I would suspect my monthly costs are closer to $200 now.

    Still, where I live, not having a car is a major issue. I know because I went without one for nearly 2 years. Luckily I could borrow my housemates car whenever I needed and he would drop me off at the train station on his way into work in the mornings. Without that I’d have been spending 4+ hours a day commuting. Nevermind grocery shopping, and all the other necessities of life.

  4. Kathy says:

    Deciding to live car-free was one of the best decisions of my life! I came to that conclusion after my car was broken into, backed into, was victim of a hit-&-run, and had red paint splashed all over it all within 6 months, and I had to pay the deductible each time. Even with cost of transit, the savings of a car-free life are incredible. Mind you, I have always intentionally lived close to work because I dislike commuting (and sometimes that has meant moving more than once a year). Don’t forget there are several great car sharing options in Vancouver now as well (Modo, car2go, etc).

    • Krystal Yee says:

      Yeah, the only problem with moving at the moment is that I’m a homeowner. :) Otherwise, I would have already packed up and left for a shorter commute. The only time I’ve ever had a short commute (10 minute walk), it was so great. I had all this extra time on my hands… would be nice to have that again. Maybe sometime soon!

  5. Brian Lang says:

    Look into the cost of renting a similarly equipped vehicle (4×4, AWD, high clearance, what-have-you) before deciding to ditch your car. Rental vehicles are expensive in the lower mainland and are often restricted from going off-pavement. Renting once or twice a month would use up most of your savings after getting the bus pass.

    • Krystal Yee says:

      Yes, that’s exactly what I was thinking of this morning. Most cars I’ve rented won’t let you drive off-road. And the companies that do let you, well the insurance is so high that it doesn’t even seem worth it. So if I did ditch my car, it would likely mean only being able to hike local areas that are accessible by paved road. :|

  6. Michelle says:

    Ours cars cost us a lot! We do like having cars so it is tough for us to decide if we should get rid of them or not.

  7. Anonymous says:

    Re: Shower comment. If your works provides showers for men and not women then yes you’re right they would need to provide you an option too. However if they don’t provide showers at all then no they do not have to provide you a shower, companies are not required to do that.

    • Krystal Yee says:

      There is one shower right now, which is only used by men. There aren’t any women who bicycle to work at the moment. I wouldn’t feel comfortable using that shower, so I’m not sure if that would warrant them having to provide a women’s one as well. It’s not a big deal right now, because I haven’t really needed a shower… but it would be nice to have that option if I want to come into work early and go for a morning run (or bike to work in the future).

  8. Kat says:

    My car costs me approximately $625/month (as I still have some payments to make at 0%!) This includes gas, insurance, maintenance and payments. I also pay $300/month for transit. Yes, it seems like a lot and I sure do wish I could find something closer to home (work), I am still able to save and don’t have any debt (other than the car payment and my mortgage). When I pay off my car, it should be good for at least five more years without major repairs.

  9. Angela says:

    I live in Prague and LOVE that I don’t need a car. Public transportation here is fantastic, I pay 200 CAD a year for unlimited use on metro, trams and buses. Work takes me home in 30 minutes. Buses are on time, to the minute, unlike slow as molasses TTC in Toronto. I lived in Hong Kong, Singapore and Prague for 10 years and I have not needed to a car because of the amazing public transportation system. If only I could say the same thing about North America.

    • Krystal Yee says:

      Totally agree. That was one thing I really noticed when living in Germany last year – every city has a very efficient transit system. I never felt the need to have a car while I was over there, because I could get anywhere I needed with public transportation. It was great!

  10. Ottawa says:

    I cycle almost everywhere – around 4000km annually. Having said that, I still own a car. The car is 10 years old now (purchased 2nd hand for 24K). Two major factors that should be touched on…and are significant – relate to car depreciation and opportunity cost (a 1,2 punch). In my example, the car is presently worth 4K. So, over 10 years, that is an average 2K loss per year (What is yours?). The 2nd punch is what would that 20K have done invested instead? At 6%…it would have come close to doubling. Add the two together and you have lost 4K per year over the last 10 years…that is $333 per month. That should be added to the overt expenses of gas/maintenance/insurance (don’t forget driver licence and registration too!).

  11. Tara Zee says:

    Lol, and we complain about our $112 monthly subway/bus pass in NYC! Personally, I’m in the move-closer-to-where-you-work-or-play boat so If you currently live in an area where you do spend a lot of free time, it’s hard to justify leaving that. Does Vancouver have anything like Zip cars, where you can rent a car by the hour? You couldn’t off road but it at least allows you to rent to get to field hockey.

    • Krystal Yee says:

      Wow, only $112 for transit in NYC? That seems like a bargain compared to here, haha! :)

      Yeah, we do have Zip Cars here, but based on the frequency I would need to use one (field hockey 3-4x/week for 3 hours each time), it would end up costing me over $350/month! :| So likely if I ever gave up my car, I’d also have to give up hockey too.

  12. Paul Marshman says:

    It’s an interesting calculation. The transit pass doesn’t look that great compared to your $300 figure, but as you mentioned, there are other inevitable costs, like repairs, maintenance, and paying for your plates. And remember that the car cost you something to buy, so you really have to figure in that cost over the life of the car. Add in those dollars and your real monthly cost is probably a lot higher than it looks.

  13. psychsarah says:

    The short answer is that my job requires me to have access to a reliable vehicle, which realistically means that I need my own wheels. The longer answer is that with a small child (and another on the way) I would loathe facing my day to day life without a car in my city. The buses here are not great. The daycare drop off/pick up and getting to/from work would suck up probably 3+ hours a day, instead of 50 minutes a day. That is time that I’m not spending working, playing with my son, cooking healthy meals, exercising, reading, etc. It would mean my son wouldn’t eat dinner on time, go to bed on time, would have to get up earlier… the more I think about it, the more I can’t fathom it! If I were to move closer to work, our housing costs would skyrocket astronomically, as the area my office is situated is sought after older part of town with expensive houses that require a lot of attention, because many are 80-100+ years old. I’d also have to give up my favourite hobby, singing in a choir, because rehearsal happens at a location that does not have transit access at all.

    That said, I’m driving an 8 year old car with 250000 km on it, so I’m trying to put off buying something new/newer for as long as is practical (considering maintenance etc.) to save money on this finance-sucker that I soooooo need right now! One day, if my kids were grown, and we could afford to live in a pricier area, I’d love to walk everywhere and rent a car for longer hauls, but that day is a good 2 decades away I’d say.

  14. robyn says:

    I’m in the process of saving up for long-term travel, so saving my money where I can is if the utmost importance. I have chosen to keep my car, despite the fact that it is costing me a bit more, but the time I’ve saved off of my commute and the additional money I was able to make because of having my car was worth it.

    On average I spent (gas and insurance) $300 a month to have my vehicle. This cuts my commute in half compared to if I had to take the bus (which would be miserable in the throws of a Winnipeg winter). Also, for a 27 month period I worked part-time serving. If I didn’t have my vehicle it’s doubtful that I would have been able to make half the money that I did since I wouldn’t be able to get there on time taking transit.

  15. dojo says:

    Since I’m working from home now, I could live without the car, but I don’t plan on doing it ;)

    The insurance is around $150/year (it’s the mandatory insurance we need to have). There’s also a separate insurance we could get (we call it CASCO), but I don’t plan on doing it. It would cost me around $500/year, but they’d give me maybe $5K if the car was totalled. So it’s not worth paying for all this money and then have to pay myself to repair the car (if the accident was my fault – that’s when you use this, since you repair the other car with the mandatory insurance) or get too little money if I had to replace it. My car is still worth at least $7-8K.

    So the insurance is pretty cheap. I also pay around $100/month on gas. It’s a small engine (most European cars don’t use up too much gas) and this could cover 1.5 tanks (as we use) – approx. 60liters. The gas is double of what you pay in the US, but we have smaller cars, so it’s OK.

    Other than that … I don’t have too many costs. We need to check the car every 2 years (memo to self, I need to do it this month) and it costs around $70. The car is still new (I bought it 6 years ago new, but it has only 20K miles on it, so it’s like new), so there’s no maintenance cost or repairs.

  16. Lucky for me my car is not costing me too much right now. It’s actually going to cost me even less because instead of driving 7 miles one-way to work every day, I’ll now be driving 1 mile with my new job, yay. Cars are super expensive though and with gas on the rise, it’s only going to get worse. We also have my old moped scooter that Mr. CrazyRichLife takes to work so we’re not using his car much either. Scooters are great, no insurance and the mpg are amazing.

  17. Asia says:

    Sometimes I am willing to pay for convenience. I have lived without a car before but it was somewhere with fantastic public transit. Where I am now, it doesn’t work… actually the bus does not even come close to where I work. Instead I opt to carpool to make myself feel better :).

  18. Ottawa says:

    Are you having us on? You drive 1 mile!!! The best way to provide financial advice to folks is to help them cut costs. The purpose of this post was to demonstrate the cash drain that even 1 vehicle can have on savings. As your husband demonstrates, there are cheaper ways to get around (moped). At most you need one used (frugal fuelly) family car. There is a secret way to transport yourself even cheaper – a bicycle! Heck, a 1 mile commute would take far less time on a bike than in a car (about 3 minutes). Then you wouldn’t have to pay for gas, (parking?), car wear and tear is at maximum on short trips…you would get the benefit of free exercise…
    I prescribe the following reading!!!
    http://www.mrmoneymustache.com/2013/04/22/curing-your-clown-like-car-habit/
    and
    http://www.mrmoneymustache.com/2012/05/07/what-do-you-mean-you-dont-have-a-bike/
    Good Luck!!

  19. Great post Krystal. I bought a car because I thought I needed one and I really wanted one. But it turned out to be the biggest financial mistake of my life. Not only did I not use it, the car and the added expenses cost over $800 a month. I sold it 3 years later with only 30,000 kilometers, paid off the loan and started walking every where. Some days I miss my car but I don’t miss the huge financial committment.

  20. Tom Parker says:

    Definitely too much. If somebody use a car rather rarely should sell it. It is unprofitable.

  21. Hopefully I can help you on this subject a little Krystal. Car maintenance is something that a LOT of people grossly overpay for. I just happen to be in the middle of a series of posts on how to save money on car maintenance over the long term. The third post of the series went live today and I’ve got one more partially written.

    I also plan to write a big post on how to buy your own quality car parts for 10-20% of what they would cost you at the dealership. Yup, car parts really are marked up that much! Of course, when you buy OEM parts directly from the dealer you usually do get very good quality parts but if you can still get almost as good quality at 10-20% of the cost, then I think that is a no-brainer!

  22. Great post ! I wish I could say the same thing about my car. I just wrote a post about how used cars can cost you way more than the sticker price. http://prosperousnotforprofit.wordpress.com/2013/09/17/how-to-lose-money-buying-a-used-car/

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