The Costs Of Owning A Car – Are You Spending $7K to $11K each year?

The Costs Of Owning A Car - Are You Spending $7K to $11K each year?Do you know how much you spend on your car each year?

I will tell all of you my story now. I’m probably one of the worst people in the personal finance blogosphere when it comes to cars because of what I’m going to tell you below, but oh well!

If you are new here, we have a Camaro 2SS that we bought last year.

We also have a Jeep Wrangler that we bought around 1.5 years ago as well.

We also used to have a 1961 Chevy Apache (click here to see the pretty picture of it – I miss it a lot), but we sold it two months ago because of a lack of garage space.

We spend a lot of money on our cars, and I know that. It’s okay though, we love them :) We are car fanatics, and it is one of the things that we work on making extra money for so that we can afford them.

 

You are probably rolling your eyes at me now, but please hear me out.

We truly do love our cars and we get a lot of joy out of them. We DO NOT have them so that we can keep up with the Joneses. In fact, I actually dislike talking about our cars because of the judgmental looks/thoughts that we usually get. Wes is a car guy, and it’s a hobby for him. I love my Jeep because WHO DOESN’T LOVE JEEPS?

Everyone has something that they enjoy spending their money on, and cars just so happens to be our enjoyment. Just like if you are a stamp or coin collector, spend money on clothes, spend money on traveling, spend money on eating out, etc., cars are our thing (but we like traveling too :) ).

I don’t think there is any “right” or “wrong” hobby for a single person, because no two people are exactly alike. If you can afford it, then why not?

However, cars are expensive, and I do realize that!

ANYWAY, to get back on topic, according to a survey done by AAA, the average annual car costs are around $7,000 to over $11,000 (depending on your car – for example, if you pick something in the Volvo car range then you will probably be spending less than an expensive sports car that gets 11 miles to the gallon).

Below are some of the common costs of owning a car.

 

Buying the actual car.

Usually buying the actual car is the most expensive category when it comes to your car costs. You can buy a car for something such as $500 cash (you can’t guarantee that it will work for a long time – however, we did buy a car for $500 once and it lasted us for quite some time, and we were then even able to sell it to another person for $500), or you could buy a brand new car where the price can vary greatly.

Not all cars are equal, and this is where you researching different cars that you are interested in comes in.

 

Fuel costs.

Certain cars have higher fuel costs than others. Your car may take only premium gas or it may take unleaded. Your car may run on grease (I have seen this happen with a few older cars), and then your gas costs are very low since you can usually get free grease from restaurants.

Then there is also the associated cost when it comes to fuel mileage. Not all cars get the same fuel mileage, and this is something that you may want to look at when you are trying to determine which car is for you. Some cars may get less than 10 miles per gallon, and others may receive over 50 miles per gallon.

Lastly, when it comes to fuel costs, it also depends on how much you are driving. If you are driving 100 miles roundtrip each day, then your fuel costs will be much more than someone who drives one mile away to their job down the street.

We don’t spend much on our fuel costs anymore, since we are both working from home. However, we do like to leave every now and then, with our favorite being to drive to Forest Park (around a 30 mile roundtrip drive).

We spend around $150 to $200 a month on gas. We could definitely be spending less though.

 

Car insurance.

This is one area that we don’t spend a lot in, even though we have expensive cars. Your car insurance could be something such as $30 a month, or it could be something like $500 a month. It depends on your car, your driving history and so on.

For us, we spend around $50 for each car, or $100 altogether each month for both of us to be fully insured on both cars. Definitely not bad, especially since others have similar cars to us and they are spending somewhere in the $250 to $500 range each month in car insurance.

We did have to shop around for car insurance though. I don’t remember the exact amount, but if we would have stayed with our original car insurance company, I believe we would have been spending around $400 to $450 a month to fully insure our two cars.

 

Car maintenance. 

Certain cars cost more to maintain than other cars. It’s that plain and simple. One car may only take the best oil out there, which may come out to $100 and over for just one oil change. Other cars do just fine with cheaper oil changes, and you may be able to spend a cheap $20 changing your oil yourself.

Also, certain cars are built to last longer than others. Others are made very cheaply and something may break every few months.

What are your annual car costs? Are cars one of your splurges/hobbies?

 

Our New 2013 Camaro 2SS and $1,713 in Extra Income

2013 Camaro 2SS

Yup, this is our new car.

Happy Monday everyone! To the left you can see our awesome new car. We bought a 2013 Camaro 2SS just in case any of you were interested ;)

This past weekend was nice and fun. And that is great because work is so busy right now that I feel like I’m running around with my head chopped off. Can’t wait until the summer and this is all over hopefully. This past weekend went by too quickly, but oh well.

We got a TON of snow yesterday. On Saturday, I had the windows open and it was nice outside. Then of course we get over 15 inches of snow and it’s supposed to just keep snowing. This really stinks because we just bought the Camaro and of course it can’t drive in this. Snow in the spring time? NO!

Today, we’ll just be sharing the Jeep but that is a hassle since we don’t work at the same time nor work anywhere near each other. I am definitely not looking forward to driving to work, then back home to take W to work, then going back to work and then going home and then picking him back up 4 hours after that. AHHHH! 

Also, I have a really awesome guest post about a fellow blogger and her significant other who quit their jobs around 6 months ago to travel the world. They have been all over and her guest post about it goes live on Friday. I know all of us dream about this happening one day, so why not live through her in the meantime? Be sure to come back on Friday!

Our Updated Living Room

A lot of you asked for a photo of how our living room looks now

Spending

Definitely a lot of spending in the past week. We bought a new car so that is expected! We are happy about one thing though, we thought it would be around $200 per month (at the minimum) for the Camaro’s car insurance, but it turns out that our insurance actually LOWERED and now we are only paying $100 per month for both of us on both the Camaro and the Jeep. That is crazy to think about. I even emailed our insurance company to make sure that was correct, and they said it was.

Everyone told us that we were crazy for getting the Camaro because our insurance should have gone through the roof. For some reason we got lucky so I’m definitely not going to complain. It is sad to see that my old car is no longer in the driveway, especially since my dad help me pick it out just one week before he passed away. Weird memory, I know, but it is still something that I think about. He LOVED Camaros though and had one for nearly half his life, so I’m sure he is super happy that we have a Camaro :)

Our New 2013 Camaro 2SS and $1,713 in Extra Income

Extra Income (does not include income from our main jobs)

I received approximately $1,713 in payments in the past week. A good week of course. I do feel like I’ve stalled with my extra income, but I am fine with that. I’d definitely rather have it be stable and having only the slightest increases than be decreasing.

Anyways, I’m still at a great level! How are you doing with your extra income? What are your goals with it? Eventually leave your job and do only extra income efforts? Pay off all of your debt? Tell me all about it! I am really interested.

Posts from my blog:

  1. No New House For Now and $2,323 in Extra Income
  2. Case of Lifestyle Inflation – But I’m Not Upset
  3. How to Stay Motivated With Debt Repayment
  4. How to Transition Back into the Workforce After a Long Period of Unemployment

 

Link Love

  1. How do We Define Success on the Internet? Frugal Portland
  2. Best Credit Card Sign Up Bonuses – March 2013 Money Life and More
  3. Wait, Are We Poor? Our Freaking Budget

 

Food

We’ve been doing really good with our food budget. I still will never say how much we were spending before, because usually jaws hit the floor. Our fridge is super packed with food though and we need to start eating more of it before it all goes bad. I do have a question though, how much do you all spend on food per month? How about per person per month?

Being healthy

I am doing AWESOME with working out. I run at least a couple of miles a day, have been lifting and eating more healthy. It does really help to have our gym in our basement. Do you prefer to work out at a gym or at home? How much do you spend per month of being fit (whether it be gym memberships, a personal trainer, organic food, etc)?

Yes, the upfront cost of buying weights (we spent over $300 in weights alone, plus $300 for the olympic bar), a “cage” to put the olympic bar on (that was another $500 plus $50 for the seat) and around $800 for the treadmill (got it at a MAJOR discount). We paid for it all upfront with extra money so it’s not as though we even noticed it. Saving up and paying for it immediately is awesome! And now we don’t have to waste gas driving to our gym which was 20 miles round trip. AND we can spend that extra time that we would have been driving and just work out instead.

Have you been doing well with your extra income, spending and being healthy?

 

Beyond The Price: Buying a Car

Beyond The Price: Buying a CarWhen you’re looking to buy a new car, one of the biggest factors is the price.  However, that is only one area that really impacts your ability to buy the car.  That’s why, if you notice the next time you’re on a car dealers lot, the car salesman will rarely even mention price.  Instead, he will talk to you about financing terms, trade in value, etc.  You see, everything is negotiable, and a car salesman will tweek anything to make a deal happen.  Here is what you need to know beyond the price of the car.

The Loan Terms

The first thing you need to think about beyond the price of the car is the loan terms.  If you’re looking at car log book loans, you need to really understand what you’re paying for.  You see, dealers will try to always make the loan work for your monthly payments, which may not always mean good loan terms.

Some common ploys are: requiring a lot down up front, stretching the loan out to 60 or even 72 months, or charging higher interest rates to account for the risk.  These tricks can actually make you pay more overall for the vehicle than other financing terms.

Your Trade-In

Another common tactic that car dealers will use is negotiating on the price of your trading in by doing a “package deal”.  In this sense, the dealer will raise or lower the price of your trade in to make the “out the door” price work for you and them.

To avoid this, focus on the price of the car first, and never mention you have a trade in.  Then, once the price is finalized, negotiate the trade-in separately, even in another transaction as needed.

Other “Perks”

Finally, dealers will always try to throw in other perks to seal the deal – like detailing, tanks of gas, window tint, or even warranties.  Understand that some of these should always be a part of a new car deal, while others, like warranties, may not even be needed.  Always know the value of what you are getting when discussing these other perks.

Getting Around in a Public Transit Free Neighbourhood

A few weeks ago I wrote a blog about being a one car household in the rural countryside. I never thought I’d recieve so many comments about how having one car to share between two working adults just isn’t feasible when there isn’t access to public transportation. I guess I didn’t make the point of that post clear enough:

Having one car to share between two working adults who must both commute to work is entirely doable. Even without public transportation.

Let me repeat that: There is absolutely no public transportation to be had in my rural community, yet my fiance and I still manage to make it work, day in and day out. Some days it’s annoying, but most days it’s not. In fact, most days I thank my lucky stars that we’ve made it work with one car, because cars are freaking expensive. Having one is bad enough, two would set me back on my debt free journey significantly.

Now, we both live way beyond walking distance to our respective workplaces, so we’ve had to resort to some pretty creative ways of getting around. Here are a few:

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Do You Really Need that Second Car?

Cars 1
Hey everyone! I want to introduce my new staff writer, Jordann. She will be helping me out and posting every Friday most likely. I love her writing so I’m glad she decided to join me on my blog. You can visit her at My Alternate Life. I’ll let her take it away now.

Growing up in a rural area, I was used to needing a  car to get anywhere. With no public transit whatsoever, and the nearest city 30 kilometres away, most families had two to three vehicles (read further on the most gas guzzling cities!). One for mom, one for Dad, and an old beater for the teenaged kids to fight over. Heck, the average Dad usually had his own personal car as a hobby that he only drove on Sundays in the summer.

Cars, in my neck of the woods, weren’t an option, they were a necessity.

This was, I thought, how most people lived. That is, until I moved to a city center for University. You mean to tell me that people don’t have cars here? This was a revelation to me. To be able to not just get around comfortably, but often more easily without a car, was a novel concept to me. I lived four years in University without ever owning a car, and even though I had access to one, I didn’t use it. Transit was the way to go, or good old fashioned walking.

Then, one fateful day the summer after I’d graduated University, I totalled my then-boyfriend-now-fiance’s trusty neon. We were moving back into rural country shortly, and the demise of his vehicle meant that a car payment was soon to grace our finances. We had no choice, we were moving to a rural area, we needed a car.

Let me tell you, after 21 years of not having to deal with a car payment, insurance payments, gas and maintenance costs, having a car has been nothing but an unwelcome expense. Sure, where we live right now, we need a car, but that doesn’t mean I like owning one. I guess it’s because I’ve never owned a car, but I’m the complete opposite of desensitized to that payment. The idea of having not one but two cars to spend money on? No thank you.

A Necessity, Or Just Convenient?

Where I’m currently living, I live eight kilometres away from work. My fiance’s job requires him to travel between 30 and 50 kilometres per day to different job sites. In our surrounding area there’s nothing but residential housing and farms. No public transportation to be had for miles around.

Yet we only have one car. Sure, it can be annoying at times, but not nearly as annoying as the cost of an extra car payment, insurance, gas and maintenance. We have to be more coordinated, my fiance car pools with a nearby fellow employee, or when he needs the vehicle he drops me at work early, or picks me up late.

We can’t go separate places at the same time without coordinating first, and we get very good at planning our errands to coincide with the other’s obligations (he gets groceries while I’m at my photography class, etc).

Having a single car is completely doable, and we don’t even live anywhere with access to transit!

Downsizing to a One Car Family to Cut Expenses

On the average month, not including maintenance fees (since those pop up sporadically), I spend around $440 per month of our 2007 VW golf. If we were to add a second car to our household tomorrow, we’d probably look for the same type of vehicle: used but in good condition, compact and good on gas.

So, theoretically, if we were to be a two car household, our automotive expenses would cost us around $880 per month exclusive of maintenance fees.

That’s a ton of money! An extra car would run us around $5280 per year! That’s a very good chunk of income. I can’t help but think that extra $440 could be put to better use, like saving up for a house down payment, putting towards retirement, or paying off the remaining $25,000 in debt I’m trying to get rid of.

No, for now I think I’ll deal with the minor inconvenience of being a single car household in a rural area, and put that money towards paying off debt instead. Things might change once I have kids, or maybe when I allow some lifestyle inflation creep, but for now I’m happy with my relative lack of mobility.

Are you a two car household? Do you think you could downsize to a single car?

 

My Car Costs

Last month I talked about how we were buying a new car. I haven’t really talked about the car since, but our costs have definitely gone up and I definitely want to keep track of it on my blog.

We got a great deal on our Jeep. We bought a new Jeep for around $4K off the dealership price. And we also got the color that he wanted, which is Sahara Tan. This is a rare color and in very high demand for Jeeps. And it was the only one in around a 500 mile radius, so when we found it at the dealership, we knew it was the one.

However, we did make a couple of mistakes when it came to buying the car, which I will talk about soon in another post. I don’t want to make this post 4,000 words as then no one will probably read it and I want you all to know every facet of my life :P

So by the time we found the tan Jeep, we were pretty much just fed up and wanted to get a car ASAP. We probably could’ve gotten another $1,000 knocked off the new Jeep price, but we didn’t really try. I’m still regretting that.

Anyways, car costs can add up super quick, as I’m sure you all know. Car payments, oil changes and other maintenance, GAS, insurance and other things all add up. Just check out Daisy’s blog post about her Out of Control Transportation Costs to see what I mean!

We have three vehicles. He has a Jeep, I have a 2-door car, and then we also have a classic truck.

We never drive the truck (the license plates are almost a whole year expired) and mainly have been keeping it just because we like it. I know I talked about how we would sell it, but we’re still just not sure what we want to do. We both really like it. And plus, now the carburetor is broken and needs to be completely replaced. We have had it professionally repaired once, but it has already broken 3 years later (with only a couple hundred miles driven on the truck), so we were told it most likely needs to be completely replaced at a cost of around $600 (the boy would install it and this will save us on labor).

This is one of our bigger car costs, but we are putting it off for a little bit because we’re not sure if we want to sell the truck completely and buy an average carb, or buy a carb that will be something that the boy will love. Hopefully soon we can get around to it. Anyways, enough with the weird mechanic talk that I don’t really understand.

My Car Costs 
This is the Jeep we bought. I blurred out the
license plate so that’s why it looks a little funny.

Below are our costs:
1. Payment. My car is paid off (yes I do realize the irony of that post), but we did just add the Jeep payment to our lives. The payment is around $400 a month, and we got a great interest rate on it, so we decided to take out a loan, as our money can be invested elsewhere and earn a better return.

Our payment is less than 5% of our after-tax monthly income, so we can definitely afford this. Cost = $400 a month.

2. Gas. Gas is definitely a decent part of our budget. However, since I am done with school, I can finally eliminate all of that extra driving I was doing in order to get to my night classes after work. I  drove around 40-50 miles extra each day because of my classes. Now I can finally lower our gas budget.

However, the Jeep doesn’t get the greatest gas mileage, so I still have to keep this is mind. We have also been driving the Jeep like crazy this past month, but that’s because we just got it and are in love, this will die down soon.

Our budget for gas for all cars is around $250 per month.

3. Car insurance. Our car insurance actually DECREASED with the new Jeep. We first signed up for car insurance with the provider that we had before (with the old Jeep), but they wanted over $200 I think per month, for car insurance that really wasn’t that great.

I talked to our agent and he said it’s unusually high, but he couldn’t get it to lower. He’s actually very nice and we felt bad leaving him because he helped us find a better rate through another company. We ended up choosing Geico. Does anyone use Geico? Our insurance is so cheap and it kind of makes me think twice.

I believe our car insurance for the Jeep is right around $70 a month (I don’t remember the exact amount, I know, I have a horrible memory). My car insurance is around $40 a month (I pay every 6 months though).

4. Maintenance. Our maintenance costs are not that high. We buy parts that are more expensive that have lifetime warranties (such as oil filters and other items) and this saves us money in the long run. Also, the boy, his family and his friends are pretty much able to fix anything.

We do budget around $30 a month for this though, just in case we don’t have time to do an oil change ourselves and have to pay for the increased cost of labor.

Our total car costs each month for all 3 cars totals:
$790
What are your car costs?