It’s the duty of a personal finance site like this one to present all angles in which consumers can save money. Sure, I give tips every once in a while on how to save a few bucks here or maybe even a hundred dollars there, but in terms of radical money saving ideas, they’re few and far between. Today however, I present an idea that should save you thousands of dollars a year, possibly tens of thousands. Perhaps it’s time to sell your automobile, never to buy a new one.
For many, this idea doesn’t make sense. Cars and trucks are means to make a living and without one, there’s no way to get to work, buy groceries or commute to wherever it is you need to go. Even though automobiles account for thousands in expenses each year, they also help in earning income. I used to think that way, then a series of events changed my mind. They happened one after another and now I drive my car 15 miles a week.
- Now working from home rather than an office job. My commuting time is approximately 3 seconds a day, as that’s how long it takes for me to roll out of bed and turn the computer on, 10 feet away.
- A Publix grocery store was built not one block from our apartment complex. I can regularly use a shopping cart to cross the street and walk all of my groceries home.
- I live with my girlfriend and both of our family’s (parents, siblings, extended family) lives in the northeast. Needing a car to visit them isn’t going to happen.
In all honesty, the past week and a half without the car was a breeze. Certainly there were times when it was an inconvenience and personally, even with the above circumstances, I could never live without my car but if I really needed to save money, the car would be the first thing to go.
Just how much money you can save by ditching your automobile depends on your situation. For example, let me show you how much money I would save if I decided to sell the Mustang tomorrow.
- Selling the car would net me around $12,000 if I go by the Kelley Blue Book value.
- I pay $110 for insurance each month and that’s only for liability. If I decided to pay for collision or comprehensive, it would cost me around $300 a month. $1,300 saved each year on this move.
- With the rising costs of gasoline, I spend around $90 a month to fill the car twice. For someone who spends more time on the road, this could increase quickly. $1,100 saved every year.
- I’ve probably invested a few thousands dollars this year on brakes, tires, shocks and an alternator. Spending that much each month isn’t normal, but factoring in $1,000 for annual repairs and maintenance is about average for most Americans. The newer the car, the lower the amount. The older the car, the higher the amount.
- Living in a city, I do have to subtract from my savings because I will be using public transportation more often. I would estimate spending $500 annually.
That means if I sold my car today, I would receive a nice windfall, in addition to saving $2,900 each year I decided to use public transportation.
That’s a good amount of money for anyone in a tough financial position to consider saving every year. Again, this move only makes sense if your living is not dependent on an automobile. If you look hard enough, I think you might find life without a car is doable.
Published or updated May 2, 2011.