I think I’ve complained about my used car expenses enough this year between hustling hard to pay off my loan by December, dealing with fluctuating fuel prices and taking care of pesky maintenance and repairs.
To say that every little vehicle-related expense all adds up is an understatement. I recently calculated how much my car has cost me this year so far and the numbers practically made me fall out of my chair.
Buying a car whether new or used is somewhat like a rite of passage in today’s society (at least on Facebook it is when you see an acquaintance take a photo of their $25,000 car that their financed like they just made a successful move). Either you have a car and can’t imagine getting around comfortably without one, or you don’t have a vehicle and desperately want/need one or the thought of owning a car has crossed your mind more than once.
In 2013, auto sales rose 8 percent to 15.6 million vehicles sold that year and the numbers and demand have been steadily increasing since then.
If you need or want a car and would like to estimate a realistic expectation of the expenses, there are tons of articles you can read out there that summarize what you can expect from a financial standpoint when you own a car. But this post on the other hand, is going to give you the raw numbers from my personal experience and current situation.
I recently went through my previous budget reports and bank statements to track and analyze my car expenses so this report can be as close to accurate as it gets. It’s important to understand that everyone’s situation is unique, so what I spend might not be what you can expect to spend (and I sure hope it isnt!)
Here are a few things to consider when reading about my vehicle expenses:
- Last year I financed a newer car (2010 with about 74k miles) after my old car literally broke down on me
- I’ve had a hefty commute to my day job 5-days per week for the earlier half of the year and my drive is still about 45 minutes in and 30 minutes home due to traffic
- Hence, I drive a little more than the average person overall. This can lead to more maintenance, repairs etc. plus I drive a great deal on the weekends too for various reasons.
Break Down of My Vehicle Expenses
This is an accurate estimate of how much I spent filling my tank up this year. I carefully reviewed past budget reports and debit and credit card statements to come up with this total. Mind you, during the first 6 months of the year, I was actually about an 50 minutes to an hour away from my job one-way. In June I moved closer in so I’m about 20-25 minutes away if traffic is normal. But most days it’s a pain so it still makes my drive feel like a commute but I’m seeing a major difference in the mileage now that I’m closer and require less money to fill up my tank.
Don’t get me started on insurance. My rates are crazy high and even though I’m a safe driver, I’m younger so that’s how things are. I actually have another insurance payment due this month but I will talk about how I’m trying to lower this category in a bit.
Maintenance and Repairs: $1,581.91
This includes all my oil changes for the year, my 2 car washes for the year :), 4 new tires, a ball joint repair and new brakes
Car Loan: $7,443.56
Regular readers know that I have been aggressively trying to pay my car loan off this entire year. I’ve been paying way ahead all year and I only have 3 more payments left. If I wasn’t aggressively trying to pay down this high-interest debt, I still would’ve paid about $2,330 so far in order to meet the minimum payments each month.
In Illinois we have what’s called an I-Pass that can go in your car as a way to automatically pay the tolls you go through so you don’t have to pull over and pay them manually. As a commuter who likes to use the expressway a lot, I’ve replenished my I-Pass quite a bit this year.
Annual Expenses/Yearly Sticker and Registration: $100
Grand Total Time!
The total amount spent on car-related expenses this year so far is:
If I didn’t have a car loan and all other expenses stayed the same I would have spent around $4,678.70 so far.
The real kicker is that 2015 is not over yet. I still owe about $2,200 on my car loan and I will need to make a few more insurance payments so my total amount spent on my car could very well add up to $15,000 by the end of 2015!!! Crazy right?
Before analyzing everything, I knew my car was costing me some serious money, but I’m slightly relieved that I actually have a real number in mind so I can work on finding a solution and making some changes.
When I think about what I could have done with $12k or $15k this year instead of drive around it makes me a little upset. There were a few times when I just wanted to sell my car and try to get by without it.
Here Are a Few Alternative Options I Came Up With
Ride a bike around: – This would be a wonderful option to get around cheaply while getting some exercise, but it’s just not going to work out for my situation. I live in a suburb that is widely spread out and it would take a while to get to specific places that I need to go along with enduring the crazy Midwest weather trends. I also have to be responsible for picking my son up from places and grocery shopping etc. so I don’t want to have to depend on others for these things since a bike isn’t going to cut it for those tasks. Plus, it would take more time to get things done and time is something I’m always trying to get more of.
Rely on the bus or train: Buses are not frequent in my area but we do have a pretty nice Metra train system that goes into the city. The Metra train runs at unique times though and it doesn’t really work around my schedule in an time-effective manner. If I took the train, I would probably have to leave the house earlier just to get to work at the same time or even later. A monthly pass to take the train to and from work costs about $185/month or $2,220/yr and I’d have to worry about finding a way to get from the train station to my actual destination as well.
Share one car with my SO: This wasn’t an option until recently because my fiance didn’t end up getting a car until we moved in June. We’ve thought about sharing a car in the future but don’t see that as a viable option now because we both have such different schedules and specific requirements and things to do. Again, if I had to wait around to be picked up or run an errand it might waste valuable time that I could use being productive.
Summing Up a Big ‘Win’ for This Year
This year I’ve been focusing on tightening up my budget and trimming my expenses but I’ve also been making an effort to go after big wins. Even though I spent an arm and a leg on my car this year, I’m relieved because I know that the worst is almost over and it will probably never happen again.
Even though I spent a lot this year, I actually invested in my vehicle and produced some savings for future years. Now that my car will soon be paid off, I will save $2k-$3k in interest. I also prolonged its life by being adamant about routine maintenance and repairs. Now I don’t have to worry about purchasing a new car for at least another 3+ years.
When I bring lunch to work instead of dining out I save at least $1,000 per year and when I cut my family’s grocery budget down by $50 to get to $300, I saved about $1,200 per yer. By not buying coffee each morning, who knows how much I save because I haven’t calculated that yet, but by spending all this money on my car and paying it off this year, I’ll actually save thousands of dollars in the years to come.
That’s a HUGE win for me.
How to Track Your Own Car Expenses
If you don’t track your own car expenses yet, you certainly should! It’s important to know where your money is going specifically when it comes to your car so you can determine whether it’s worth it to drive your vehicle or not from a financial standpoint. There are quite a few ways to track your vehicles expenses:
- Start by saving physical receipts from oil changes and other maintenance and repair services. Place each of your receipts in a folder and file it away in a safe place
- To track other fluctuating expenses like fuel costs, be sure to use one credit or debit card for these purchases so you can easily track your spending by reviewing a statement each month. Make sure you include fluctuating auto expenses as a category in your written monthly budget
- If you can, separate your auto expenses from your other monthly expenses so you can compare which percentage auto expenses are taking up in your budget. If you don’t want to do all this by hand, you can sign up for an account with free budgeting apps like Mint or Personal Capital
- Tracking your mileage is also important. Since I bought my car last April, it will br easier to track my starting miles to the miles on my odometer at the end of the year. A lot of insurance companies are actually giving away devices to insurance holders to put in their car that tracks their mileage and driving habits in order to offer discounts. Ask your insurance company if they provide anything like this. I know mine does.
- Once the year is over. Store your digital documents and physical file folders away and start new ones for the new year
Feeling Overwhelmed with Having to Keep Up With All of These Car Details? Check out this Cheat Sheet
I didn’t create this cheat sheet myself, but I think it’s very helpful to understand what you need to check out and maintain for your car and when you need to do it.
What I Plan to do to Keep Auto Costs Low Next Year
I DO NOT want to spend $12,000+ on vehicle expenses next year so here are a few strategies in place to make sure that never happens again.
- I’m going to start saving up for a new car in January 2016. Once I have my current vehicle paid off, I want to start preparing for the next 4 or 5 years so I can avoid having history repeat itself and being pressured into getting a car loan for my next vehicle. I plan on setting aside $200/month for the next few years to build a replacement vehicle fund should I ever need it
- In January, I will also drop my insurance coverage down to liability. The company I currently have insurance with actually charged me more for the new quote they sent this month and I was not happy about it. I have a good driving record, and quite frankly, I’m tired of having to pay my dues because I’m younger. If I can’t negotiate a much better rate with them next year, I’ll have to move on.
- To keep fuel costs down and reduce the wear and tear on my car, I’m actually going to attempt to drive less next year. While I can’t do much about my commute as long as I stay at my current job, I can cut down on unnecessary driving on the weekends and during the warmer months. I live near a decent amount of stores so while I can’t ride my bike to work or long distances, I can walk or ride my bike to a few stores, along with the library that is right around the corner.
It was truly shocking to find out that my car was my highest expense this year, but I believe in identifying your major financial issues or expenses that drain your budget and going after the big win by refocusing and taking the necessary steps to reduce that expense.
What was your biggest expense this year?
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