Until the Robot Cars Arrive, Here Is How Much You’re Paying Per Year of Car Ownership
Nicole Dieker

Ooh, I hope this post gets enough responses that we can graph the data! (#financenerds4LYFE). I have now experienced both the smug recommended type of car ownership (pay cash for a car, take public transport often) and the “you’re so dumb why are you wasting your money” version (car payment for a car that is a mere 3 years old and requires comp and collision insurance, AKA the ones that drive up your bills).

SO! the data. As background, I had paid cash for my much-loved Mazda Protege, then moved to England and my car was unable to wait 3 years for me.:( When I came back, 4 months of unemployment ate my savings up, and then I got a job in a small city where a car is nearly necessary to function/enjoy life. I found the best, cheapest, most reliable car that I could find (as an aside- car-shopping is not easy when you don’t already have a car! People around here also seem to be willing to travel 50 miles to car shop) for $6200. Even with my safe driving record, insurance is high when you need to be able to cover the full replacement value of your car for the loan owner- I managed to pay off the loan in 2 years, and immediately cut my insurance payment. Mint tells me I averaged $3500/year in total auto expenses during that time, with only low cost repairs (that were nonetheless a PITA- I had this ongoing hoodlatch problem that made my car undriveable for weeks at a time, and it’s not a part you can buy).

This spring, both my clutch and catalytic converter went out at the same time, for total repairs of at least $1200. The time suck of gettting that dealt with, plus previous problems that had ruined several planned weekend trips and the inability of my car to deal with our massive snowfalls, made me decide eff it, I should get a new car. I got a good deal ($14,000, +$900 MA sales tax) for a used 2012 Subaru impreza with AWD. So, in addition to the $4500 cash I put down, I will apparently be averaging $450 month on combined car payment, insurance, gas, tolls, parking at work etc, for the next 5 years. I did get a minor raise that nearly covers the monthly payment for my (very low interest) loan, which was part of my consideration of whether this was the right plan, but still.

TLDR, my new car will cost me $5400 a year but will hopefully last much longer than 5 years, and I had huge advantages in having emergency fund cash, having great credit, and having a flexible job that gave me time to deal with getting a new car and getting rid of my old one. And it’s still definitely having a financial impact (bye bye E fund and travel this year). So like everything else, whenever people get super judgemental about someone else spending stupidly on cars, I just think, some things work for you that might not work for other people, especially if they are poor.