Travel to 50 countries vs. buying a new SUV

A few months ago, I totaled my car while driving in New York, taking a sharp turn that I’ve done a thousand times before, and then losing traction on the rear wheels on my trusty Ford pickup truck. Everything turned out to be fine — that car probably didn’t have much life in it left with 220,000 miles on it anyway, but for the first time since I was 16, I ended up without having a car in my possession.

My first instinct was to go out and buy another car pretty much right away — maybe this time something with a little less than 200,000 miles. However, for whatever reason, I decided to hold off for a bit. In the back of my mind, I figured that this presented an interesting opportunity to experience the lifestyle I always preached to others but don’t actually live myself — being car-free and just relying on other modes of transportation to get around.

I have to admit — it wasn’t easy to stick with this decision especially in the midst of Winter in Boston. And considering that most of my peers have vehicles, the “peer-pressure” is high to get it yourself. But there is one thing that kept me from going through with it — and that’s what I wanted to talk about next.

Experiences vs. things

I’ve always tried to put a higher priority and value on experiences over physical stuff. I don’t always succeed– especially with having an REI in my neighborhood — but I try to as a whole. Travel happens to be one of those types experiences that’s pretty high on the list of importance to me. We all travel for different reasons and in different styles, but for me, it’s a way to live a richer life and get exposed to things that you may not find in your hometown.

I was lucky enough to have had an opportunity to visit a little over 50 countries and that has only piqued my interest to do more. Not to assign a lot of importance to an arbitrary number, but I was thinking as to what it would take to actually visit 100 countries by the time I’m 30–35.

So, I did a bit of math and it came down to an interesting fact — the cost of visiting, say, 50 countries is actually equivalent to the price of a new, mid-range car. When put that way, it presented an interesting choice — if you have limited resources, as we all do, what do we consciously choose to spend them on?

How much does a car really cost?

So, let’s do a bit of math and use some actual examples. We did quite a bit of that during my time at RelayRides when we were trying to understand the true cost of owning a car.

A typical new mid-size, mid-range SUV, like a Toyota 4Runner or a sedan, such as Toyota Avalon, will set you bac somewhere between $30,000 to $40,000. That’s just the purchase price, without taking into consideration the insurance, repairs, maintenance and the like.

If you look at actual cost of ownership in a state like New York, the cost over 5 years — assuming that you finance the car, drive about 10,000 miles per year and then eventually sell it — is $45,000 (Avalon, 4Runner), Personally, if I’d factor in the number of parking and other tickets I’d get, it’d probably jump to $55,000 for me.

Of course, we are just referring to brand-new cars and granted, there are different cars — some are more expensive, some are cheaper. You can buy a new car for just $15,000 as well or you can buy a used Avalon for $7,000 — but then again, lot of us still end up getting new cars at one point or another.

To be fair, we should account that if you don’t buy the car, you are likely to have other transportation expenses that car ownership offsets, such as public transit ($100/mo) and occasional carsharing, car rental or taxi use (say, $100/mo)– which we can roughly estimate at $2,400/yr or $12,000 over a course of 5 years.

Nevertheless, if you subtract that from what it costs to pay for a new car, you’re still looking at an extra expense of ~$33,000 over the course of just 5 years

$33,000!

How much does travel really cost?

When it comes to travel, I think that one misconception that a lot of people have is that it’s very expensive to do. It doesn’t have to be. And you certainly don’t have to bum around, sleep in airports and bring your own food everywhere you go to “value” travel.

The $33,000 spread out over 50 countries is about $660/country visited.

Naturally, everyone is different and people have different criterias for what they want to get out of a vacation. Furthermore, certain regions like Europe may be more expensive, while others such as Asia, South America and Africa can be done on a smaller budget.

But based on the cost of travel that I’m experienced in Asia, Africa, South America and Europe, I’ll base my following calculations. If your typical vacation is 10 days and you’re able to visit two neighboring countries on the same trip and use miles for the airfare, you’re looking at around $1,300 allocated per trip.

If you travel as a couple and double the budget, it becomes even easier. Especially, as many of the things like accommodations and certain local transportation can be shared.

In order to make this work, there are a few other things you need to take into account:

- You have to understand the Frequent Flyer mile programs and how they work. You don’t need to learn anything advanced, but the reality is that the air tickets remain one of the largest expenses when paid in cash and can be reduced dramatically through miles. On average, your out of pocket cash cost on any roundtrip ticket with miles will be $100–200. That would leave you with $1,100–1,200 to spend on the actual vacation.

- Combine two countries during a visit if the time allows. Again, while flying from the U.S. to Europe, Asia or South America is expensive, once you’re already in the region, visiting a neighboring country can be as simple as a bus/train ride away. If you’re able to combine visiting 2 countries during your vacations, it’ll play a huge rule, while the experience at bordering countries can be quite different.

- Stay in Airbnb and apartments rather than hotels when in big cities. You don’t have to sacrifice comfort and privacy. You can find terrific places to stay in that add to your local experience, while at a fraction of the cost that you’d pay for a hotel.

50 countries is an example I picked for me based on my own preferences. For some people, $33,000 will only cover 30 countries. For others, it may be 75. For a couple, it may be half of that — 25.

But the idea remains the same — it’s pretty amazing that you can visit a quarter of the world for the cost of something that we sometimes buy almost for granted, because we everyone else has it or because we think we should.

When presented with a choice of having a new car or having the opportunity to explore more corners of the world (or pursuing any other passion that costs up to $33,000), personally, I think that I would take the latter.

What about you?

Originally published at www.quarterlifemusings.com on February 8, 2013.