Auto Costs On The Cheap
One area of spending where we have done a great job of keeping costs low is auto expenses. This is an area where you can get by on the cheap (one old beater to share for the whole family) or very lavishly (a fleet of 3+ luxury sedans and a beefed up toy hauler pick up).
As with most expenses, we focus on the value side when making transportation decisions. Our goal is to get from point A to point B reliably and consistently, and keep our vehicle operating expenses low.
We have two Hondas, both 13 years old, both bought brand new. As I explained in my recent post on the RootofGood household finances, our auto costs run around $3,500 per year total. Gas costs are the bulk of the expense at $2000 annually. Maintenance/repairs, insurance, taxes, registration, and inspection are $1500 annually.
The biggest auto expense comes from gas for Mrs. RootofGood’s 45 mile round trip commute. It is almost all freeway, and she travels off peak, so traffic is minimal (usually a 30 minute commute one way).
Mrs. RootofGood drives around 12,000 miles/yr, and 85-90% of that is commuting. We use my Honda Civic for the every day driver if we happen to drive around town as a family. With 3 kids in the back seat. The Civic can be snug at times (for the three kids in the back anyway), and we use the Honda Accord and the way more spacious back seat for vacations.
When I was working, I drove around 6,000 miles/yr. Over half of that was for work. My commute was ~2,300 miles during the year, and probably another 500-1000 miles of reimbursed business travel (at a rate of $0.56/mile). Our cost of operating the cars add up to approximately $0.20/mile not including depreciation.
$0.20 per mile seems like a low operating cost. Both cars are sedans, and as a result many maintenance tasks are less expensive than those for larger vehicles. Replacement of four tires, for example, usually runs $250-300 including installation for mid-range all season tires.
Our personal travel mileage including vacations, shopping, errands, hauling kids to/from school and to grandma’s, social visits, and the occasional beach or mountain vacation add up to approximately 4,000 miles per year in recent years. Or a little over 300 miles per month on average.
I recently quit working, so my mileage is likely to drop from 5600/yr to 3000 or so. I normally walk the kids the 1/2 mile to school, and we walk to parks, the library, the community center, restaurants, the grocery store, the dollar store, and other shopping in the neighborhood at distances of 0.5 to 1 mile. We enjoy living in an area where we can walk to many different destinations.
At $0.20 per mile vehicle operating costs, walking instead of driving also saves us a small amount of money on each trip. Walking the kids to school, for example, saves us about $75 annually. The money is relatively trivial, but the enjoyment of the outdoors, the social interaction with neighbors and friends you see while walking, and the fitness benefits make walking worthwhile. It also helps the kids get accustomed to walking, so that when we do go on vacation, they usually make it at least a few blocks before they start whining!
Now that I’m retired, my typical weekly driving is a grocery store trip, and usually a kid related errand or two (doctor’s office, it’s raining so I drive the kids to school, playdate, or birthday party) and a lunch out with friends one or two times per week. I think the longest trip I have taken in the 1.5 months of my retirement to date has been 16 miles round trip to meet a friend for lunch near his workplace. Otherwise, a typical trip is 3-4 miles one way.
We have considered going to 1 car when Mrs. RootofGood retires in a couple of years. Most of our auto expenses have been work related, and those expenses will stop soon. I guess I’ll have to do the math of what it costs to have a car sit mostly unused all year. I don’t know what value we would get out of having the 2nd car if we are both retired.
Our schedules will be much more flexible at that point. I would estimate having the second car might come in handy once per month. Right now the plan is to keep the second car for a year or so and see how much we use it.
We also live 1/2 mile from three different bus routes that connect to most of the destinations we travel to routinely. I used to ride the bus to work regularly, and the travel time was actually less than my commute in my car, since the bus dropped me off at my office building’s front door (instead of my car’s parking space 2 blocks away). The bus is only $1 per trip, and I’m comfortable enough riding it to get around in a pinch. It’s a little bit of a hassle, but so is maintaining cars. The bus might be plan B if we go to one car.
At some point we will have to update our cars with newer cars. I am tentatively planning on buying a lightly used 6-7 year old car for around $10,000 or so. Given our growing family, the next car might be a minivan. Gas mileage and operating costs will be higher than those for our sedans, but our annual mileage won’t be as high as it has been if Mrs. RootofGood isn’t working.
A great way to chip away at auto expenses is to shop your auto insurance. Don’t assume that your auto insurance provider has the lowest rates around year after year. The auto insurance market is competitive, and the best insurer this year probably won’t have the most competitive rates in a year or two. Many providers offer discounts to new customers.
If you haven’t shopped your auto policy in the last year or two, make sure to do so now or at your next policy renewal. Like those Geico commercials say – you can save up to 15% on your auto policy in 15 minutes. Except you should talk to 3-4 insurers to increase your odds of finding the cheapest policy. So make it an hour. In my opinion, spending an hour to save a few hundred dollars is an excellent investment of time.
We only pay around $550-600 per year for auto insurance for the two of us. I still call around every year to see if anyone can undercut my current insurer. The last couple of years I haven’t been able to cut costs in this area, but I’ll keep checking since my rates just went up a small amount at the last renewal. I get very little value out of “customer service” with an auto insurer, since we have an incident extremely rarely (maybe once every 5-10 years). The leading insurers seem to be fairly similar (and faceless) once you get beyond their marketing (hand holding, being “there” for you, having cute lizards/cavemen, etc).
Before I close out this post, I wanted to touch on auto maintenance. I do minor tasks myself, but take the car in for routine oil changes roughly on the recommended schedule. The auto shop does a free 30 point (or some large number) inspection and gives me some problem areas. Many times these are total B.S. after I research the issue a little, but sometimes the problems they identify are actually problems.
I have found that it is usually better to spend $100-200 to fix a minor problem before the problem causes catastrophic failure of some important system in the vehicle.
You can call around to a couple trusted auto shops to see who can do the repair for the lowest price. I have found some routine maintenance tasks can be significantly cheaper at the dealership versus the independent mechanic’s shop. Apparently that is because the dealership will lie through their teeth and recommend totally unnecessary repairs (= pure profit), to which suggestion you respond with a firm “no, thanks” until you research and possibly debunk their recommendation. Again, sometimes the suggested repairs are legit, but not always.
I have a trick for tire rotations. I always get my tires installed at Discount Tire. They tend to be the least expensive option anyway, and I buy the tires at one of their big sales they have a few times per year ($100+ off per set of tires). The kicker is they offer free tire rotation and balancing for life, and they will repair punctured tires for free (in my experience).
I also do a few maintenance tasks myself at home. I’m generally scared to do anything with the engine itself, but I’ll complete simple tasks like replacing the air filter and checking and refilling fluids (brake, oil, windshield wiper, transmission, power steering, coolant, etc.). I have a reminder on my calendar that pops up on the first Saturday of the month to remind me to check the tire inflation levels, and the oil and coolant levels in our cars.
Our cars are 13 years old, and at some point are likely to start leaking tiny amounts of oil and/or coolant if there is a leaky gasket or pin prick hole in a hose. I would rather figure this out at a routine monthly maintenance check in my driveway than 20 miles from home in the rain stranded on the side of the interstate.
I’ll dabble with small repairs like replacing bulbs and fuses, resetting the OBD computer, and most recently, replacing the power window motor and arm. Youtube was my friend for all those tasks. The parts are usually a tiny fraction of the total cost of repair if you went to an auto shop. I have probably saved $1000 or more over the years doing simple repairs at home.
To manage routine maintenance, I keep a spreadsheet where I record all maintenance tasks completed, along with the odometer reading and date. The spreadsheet has the recommended maintenance intervals for all tasks such as replacing coolant, replacing spark plugs, rotating tires, changing the timing belt, replacing the transmission fluid, and of course oil changes. The schedule I keep in the spreadsheet helps me keep up to date on maintenance. I also use the spreadsheet to keep notes on problems the auto shop has mentioned, or things that I discover on my own.
How do your auto maintenance and operating costs compare? Are you your own mechanic?