Have You Ever Considered the Real Cost of Owning a Car?

Have you paused to ponder the true cost of running your vehicle? It goes beyond merely jotting down how much you spend on fuel. Admittedly, I had not given it much thought. Sure, I'm aware of my fuel expenses; I fill up my tank and do my best to avoid unnecessary trips. I even hunt for the best deals at gas stations, often fumbling with incorrect discount codes and loyalty cards. Yet, aside from budgeting for gas and noting the costs as they come up throughout the year, I had never calculated all the associated expenses of vehicle ownership until now. After an intriguing question sparked my curiosity, I decided to take a deeper dive into these costs, only to discover numbers I can’t ignore.

Revealing the Hidden Costs

Let me share the question I received: "Hi Ruth, can you break down car expenses like Mr. Money Mustache does on his YouTube channel, but for New Zealand?" Cheers to you, Kurt, for pushing me into this revelation! I started by watching Mr. Money Mustache's video, and soon after that, I found myself engrossed in a lively discussion with Jonny about the differences between the examples presented and our own situation in New Zealand. To ease my concerns about the potential discrepancies, I quickly calculated our vehicle expenses for 2018. The results? Let’s just say they caught us off guard.

Understanding Depreciation and Its Impact

We maintain two vehicles, and the costs associated with them are staggering. Over the past eight years, our trusty Mazda has lost about 60% of its value, amounting to roughly $1,500 per year in depreciation. The Skoda, less than two years old, has depreciated 23%—a striking $3,500 annually. When you factor in these losses, the math takes a shocking turn. Adding depreciation into our weekly ownership cost escalates it to a whopping $195!

Additional Costs that Add Up

Now, Mr. Money Mustache's breakdown dives deeper into other expenses, but for my calculations, I've kept it simple—parking fees and tolls, while they matter for many, don't significantly affect us due to our location. Our humble carport shelters one vehicle while the other battles the elements outside. We had assumed we were cutting costs by foregoing a garage, but I can't ignore the nagging thought that we might be missing some important considerations!

Why Two Cars Matter in Our Lives

Here lies the crux of the dilemma: while we live in Alexandra, New Zealand—a charming town with its delights—we're at least an hour away from larger cities like Queenstown and Wanaka. The distances make having two vehicles practical. Just recently, Jonny is setting off for a week, and I can’t imagine being stuck at home without transport. Friends nearby live on a lifestyle block, and I once lent them a car when one of them was housebound. If I hadn’t offered, I feared they’d be contending with a week of solitude and boredom—unlike me!

Turning the Spotlight on Alternatives

Meanwhile, Kurt is a shining example of minimalism in car ownership, managing quite contentedly with a single vehicle for his family of three. He cycles to work, even in the chill of winter, and embraces life with a Honda Fit, which he insists is surprisingly spacious and fuel-efficient. The comparisons are staggering—having a smaller car has proven to be much cheaper in all regards, from servicing to fuel. His approach opens up a new perspective on whether we really need two cars.

Toward a More Thoughtful Future

This reflection has left me rethinking our vehicle situation. The standout expense significantly illuminated was insurance, which I plan to reevaluate. The key takeaway is the urgent need to question our necessity for two vehicles. While I cherish the convenience, the cost implications could be reduced significantly by eliminating one of our cars. Transforming ingrained habits takes time, and as our daughter approaches driving age, it’s the perfect moment to reassess what we truly need.

Envisioning a Shared Future

As I conclude this journey of exploration, I can’t help but ponder if car-sharing might take root in Alexandra someday. I’ve seen glimpses of this in smaller towns, where community electric cars are on the rise, and residents eagerly support them. In larger cities, friends frequently hire a vehicle for their monthly errands. I find the concept of a sharing economy captivating, and I'd wholeheartedly participate if it came to my neighborhood!

Happy Saving!

—Ruth