2019 Auto Costs from Castle Farr

Just in case you are wondering how bad it is for me, I want you to have the full disclosure: my favorite thing to do on New Year’s Eve is “nerd out” and reconcile all the financial data from the year.  This year was no exception to that tradition, and so I have the numbers neatly summarized and broken down for you.

Another tradition of the new year is for me to post what our family spends on auto expense annually.  The reason I share my information is to make a point about how advantageous it is to drive paid-for cars.  

This year, I drove a 2016 Hyundai Elantra (Lilly) and my husband drove a red 2001 Hyundai Tiberon (Little Red).  We have full coverage for insurance on Lilly, and liability only on Little Red.  

In 2018, we spent 3488.41 on our annual car expenses.  We did have some repairs, but not on level of a transmission or motor.  (Think more like serpentine belts, etc.)  In 2019 we spent 3672.62, so our costs increased.  (We had to replace a window on Little Red that shattered, fix the window so it would roll up and down again, but again, no clutch or transmission.)

That figure includes the following:

• Insurance
• Gas
• Car Washes
• Repairs
• Tags

(and to be honest, I can’t remember if I counted the property tax as “auto” or “taxes” this year)

So, let me give you a breakdown:

2018:  $3488.41/12 = $290.70 per month

2019:  $3672.62/12 = $306.05 per month

And that is for everything car related.

Folks, someone with one vehicle in their possession, spent over $7,000 in annual vehicle costs.  (They have a new vehicle with a payment).  Their monthly average is over $583.00 per month.  That is almost twice as ours, and they have half the vehicles!

The math speaks.  It is wise to drive older, paid-for cars.  Even if you have to do major repairs on beaters, as we have, you can come out several hundred dollars under the average of someone with a car payment.  We have replaced clutches and transmissions, and our mechanic shop knows us on sight or by our first names when we call.

Dave Ramsey made a point much like I am going to present to you now: if you get out from under your car payment and choose to drive a $1000.00 vehicle for 6 months and save $450.00 per month, in 6 months you can be driving a car worth approximately 3,700 dollars.  (Your $1000.00 car will most likely not radically depreciate in 6 months time, so you can get back most everything you paid in on it.)  

If you save $450.00 per month and drive your $3,700.00 dollar car for 6 more months, at the end of a year you could be driving a car worth approximately $6,400.00!  Think of where you could be at the end of two years!  (You won’t be done paying for a car loan in that short amount of time, so with a payment you would be depreciating instead of upgrading!)

The dealerships are counting on you to make an emotional decision (I need to impress that girl, or I need to keep my kids safe), and they want you to live in slavery to your creditors.  Beware the 7-year loan that is gaining popularity especially!  (You will pay a horrid amount of interest with a loan like that, increasing the true cost of your debt-ridden ride substantially.)  Stay smart!  Drive used, paid-for vehicles and don’t be that sucka.

With Love,

Castle Farr