Why You Can't Afford Not To Have A Car

Photo credit: Aude

You've probably read that if you're worried about money, you shouldn't own a car. Cars are expensive to purchase and have ongoing costs such as gasoline, maintenance, repairs and insurance. It's easy to spend several hundred dollars each month for the luxury of owning a car, and if money is tight, that several hundred dollars might be better spent elsewhere. What we often overlook are the ways that owning a vehicle can actually benefit us financially. To read about the ways that owning a car might actually allow you to come out ahead, check out my Financial Edge article, Why You Can't Afford Not To Have A Car.

1 comment:

Anonymous said...

I agree that we should consider the decision to own a car carefully and not just write off the intangible benefits of car ownership. However, I feel that your analysis isn't complete.

First of all, driving 600 miles costs far more than the $80 in gas. The big expense comes from wear and tear and depreciation. The IRS estimates the cost of driving at $0.55/mile, and AAA estimates are much higher.

$0.55/mi brings driving to $330. Still cheaper than your $350 plane+rental car estimate, but let's not forget that the 10 hours (!) it would take to drive is worth something too. If you're taking a vacation day or time off of work to drive for 10 hours, you're not doing yourself a favor.

Second, I'm skeptical that you can easilly cut your grocery bill in half just by owning a car, unless your only local grocery option is a convenience store.

Also, it's not a given that a cheaper house and better job is a good trade for a long commute. Forget about the stress and risk of accidents for a minute. We're talking about time you get to spend with your family here, which you can't get back.

I understand that many (most?) people in America are just scraping by these days, and free time is a luxury. Food and clothes come first, right? But if you have the means to buy yourself more time with your kids, I say do it. I think this is one area where it is easy to get caught up in the numbers in our bank statements, and forget about the actual purpose of our lives.

On the flip side, most places in the US have terrible public transit systems (even here in the San Francisco bay-area), and car ownership can almost be considered a necessity. I'm not suggesting everyone sell their cars.

I own a car myself, and I think it's worth it. However, I live in an area where living expenses are already high, so car ownership is a much smaller fraction of my expenses than it is for most Americans. I also have a cheap, low-maintenance, high-mileage, beat-up old car, which I don't drive to work. This helps a great deal.