As I wrap up things here in the USA to plan for my trip to Asia I faced a difficult decision. Do I park my car somewhere and pay a monthly parking fee for a few months while I decide how long I’m staying? Or do I sell it and be done with it.
Keeping the car would mean continuing to make car payments, car insurance payments, vehicle registration, as well as a monthly parking fee somewhere. Ugh. The expenses were going to add up to around $400 a month. I decided to sell it.
I got a better deal than expected. After I sold the car I was able to determine the total cost of ownership. Despite getting a good deal buying AND selling it, I was floored by the total cost. Mr. Money Mustache was RIGHT. Cars are EXPENSIVE!!!
My Car Cost HOW MUCH?!?
Let’s calculate the total cost of ownership.
I bought a 2016 Honda Fit around Dec of 2016 for $17,940. Throw in sales tax, county fees, title, doc service fees and we wend up around $19,800. But of course, this was the end of the year. Almost exactly two years later, I sold it for $12,000.
This means I lost $5,000 on car depreciation. That’s not that bad for driving a mostly new car for two years. But wait there’s more.
We also need to figure, gas, oil changes, new tires, insurance, registration, IPASS, and car washes. Rough estimates are as follows.
|Gas||$115.00||$1,380.00||Around 12,000 miles a year|
|Maintainance||$50.00||$600.00||Oil Change, Car wash, New tires|
|Tolls||$26.00||$312.00||Occasional trips to the city|
|Depreciation||$326.00||$3,912.00||Depreciation loss upon selling|
Over $600 a month to buy a tiny fuel-efficient economy car. One of the cheapest on the market. Yikes.
Now, of course, keeping a car for only two years is far from ideal. Most of the depreciation happens in the first three years or so. But that still only accounts for about half the expense.
What’s crazy to think about is this is a Honda Fit which is one of the more fuel-efficient cars. How much more are people spending to drive bigger, less fuel-efficient cars. In the future, I’ll do whatever I can do stick to Ubers, biking, or some type of public transportation.