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?

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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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?