Why should you give up your car? You’ve cherished the freedom of mobility since the day you first got a car. Reasonably enough, you get agitated and emotional when people ask you to hand over the car keys. Most of us would like to help the environment, but giving up our cars just seems too much. Or is it?
I don’t always hate cars, but I think car ownership is really unnecessary for most people. There are often greener and more simple solutions for getting from A to B. There are plenty of good reasons to ditch your car, but I really want to focus on the financial issue today because it’s seldom explored.
Cars are extremely expensive. When I decided to go green last year, my motivations were not completely altruistic. My wife and I were both college students, so we didn’t have a lot of cash. Bicycle commuting was a much cheaper alternative to driving. Instead of spending $6000 for a used car, I spent $150 to equip my bicycle with grocery baskets so I could use it for shopping. We also purchased a tandem bicycle for $250 that my wife and I now use for bicycling to church (the round-trip distance is about 10 miles). By saving on car expenses, we could devote extra hours towards starting our business instead of working outside to make car payments.
The average American household spends around $10,000 per year on car ownership (this includes auto insurance, gasoline, and maintenance). That’s quite a large sum of money to pay for the privilege of sitting in traffic jams. Car-free living can be quite profitable if you stash the savings away each year. A little math reveals some startling conclusions:
Estimated Savings (assuming $10,000/year car ownership expenses saved, at 7% return on investment compounded annually)
- Car-free for 1 year: $ 10,700.
- Car-free for 5 years: $61,532.
- Car-free for 10 years: $147,835.
- Car-free for life: $2.1 million dollars. (1)
What would you do with an extra two million dollars? You could pay off debt, or save for your retirement, or work less. If possible, I encourage you to donate it to a charity (2). Try the math yourself and see how much you can save (3). After playing with the numbers, you’ll quickly realize that every time you authorize an insurance payment or fuel up at the gas station, you’re burning a hole through your wallet. Take the time today to ask yourself the two-million dollar question: “Could I get by without a car?” Wean yourself off the car addiction today and your wallet will thank you tomorrow.
On the next post, I’m going to talk about the environmental impact of cars and hint at some practical solutions for living a car-free lifestyle. Stay tuned.
Have you consider going without a car? What do you think would be the hardest part living without a car?
- I assume that if you go car-free for life, you will go car-free for about 40 years (I assume you are about 25-years old and continue saving until you are 65). Calculations courtesy of MoneyChimp: http://www.moneychimp.com/calculator/compound_interest_calculator.htm .
- I encourage Christians to consider going car-free as a way to help support their church and church-related charities.
- Calculator courtesy of MoneyChimp: Vary the numbers up with your own situation: http://www.moneychimp.com/calculator/compound_interest_calculator.htm . I used the following values: current principal is $0, annual addition is $10,000, years to grow is 40, the interest rate is 7%, and the amount is compounded 1 time annually.