My partner and I have been a one-car household for years. I work from home as a freelance writer, which has enabled us to get by with one vehicle. We used to live in a suburb where you could walk or bike to a few restaurants. This made it much easier to be a one-car family because I could still access amenities after my partner took the car for the day.
Now that we’ve moved to a rural area, I find living with one car much more isolating. When my partner takes the car for work, I’m pretty much stuck in my house, especially during the winter. In the summertime, I can make the hour-long bike ride into town if I really want to. But in the winter, I’m usually snowed in.
I’ve also been thinking about getting a real estate license and working part-time as an agent. Because I’d have to drive around to show properties, I’d need my own car to make this side hustle possible. For these reasons, I’ve been seriously considering getting a second car. But after running the numbers, I don’t think we can afford another vehicle right now. Here’s why.
We Live in the Most Expensive State to Own a Car
My partner and I live in Michigan, which has been ranked as the most expensive state to own a car. Between gas, maintenance costs, car insurance, and car payments, it costs an average of $775 per month to own a car here.
Based on my own budget, that seems like a pretty accurate figure. We spend $500 per month on gas alone because my partner is a salesman who drives around and visits clients all day. Our car insurance costs around $200 per month because car insurance is expensive in our state. We have to get frequent oil changes because my partner racks up lots of miles on the car, which costs $100 every 3 months.
Last year the car needed a lot of work done on the catalytic converter and other essential parts. We had to shell out $3,000 on those repairs. Looking back at our budget, $775 per month may be a slight underestimate of how much we pay for transportation! Even though we don’t have a car payment, we sink a lot of money into gas, repairs, and insurance every month.
If we got a second vehicle, our total transportation costs would probably exceed our mortgage payment. We wouldn’t be able to save nearly as much if we added an extra $700+ per month in expenses. Although I could bring in more money by starting a real estate side hustle, a large portion of what I earned would probably go toward transportation costs. Since being a one-car household saves us so much money, I don’t think I can justify getting a second car, especially with the way vehicle prices have risen.
Can’t Justify High Car Prices
My partner and I haven’t been saving for a second car, so we definitely can’t afford to buy one in cash right now. And since I’m not comfortable taking on more debt, we wouldn’t be able to get a car loan.
However, personal finance is all about priorities. If we shifted our financial goals around, we could probably sock away enough money to buy a second vehicle outright in a year or two. With some planning and cost-cutting, we could afford a higher car insurance payment and gas bill.
But I can’t justify putting our other financial goals on hold to buy a car at such an inflated price. In May, used car prices were a whopping 22% higher than the previous year. New car prices were also up 12% year-over-year as of February. Cars used to be a depreciating asset. However, because of these price surges, some car owners have been able to sell their vehicles for a profit.
Waiting to See if the Car Market Cools Off
Many people have no choice but to buy a car at a sky-high price because they need it to get to work. Since a vehicle isn’t a necessity for me, I’m going to wait and see if the car market cools off and gas prices come down.
But since we live in an expensive state to own a vehicle, we may decide the benefits of owning a second car aren’t worth the costs after all. Sometimes making the best financial decisions for your family involves some sacrifice. As Paula Pant says, you can afford anything, but you can’t afford everything. I may decide that having a little cabin fever and not being able to pursue real estate as a side hustle is worth it to save $700+ per month.
Are you a one-car household or do you own multiple vehicles? Let me know in the comments section below!
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Image and article originally from www.savingadvice.com. Read the original article here.