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How I Accidentally Saved Over $8,500 a Year with My Car

by Dan Woodard

So how did I accidentally save all that money with my car? The short answer is I sold it for personal reasons and accidentally saved thousands of dollars a year as a result.

Several years ago I became really tired of commuting in my car. I live in Portland, Oregon and the traffic is getting worse and worse as the population increases. Driving was really stressful and was making me miserable. I didn’t like the impact that my driving was having on the environment either.

I decided to walk, ride my electric bike, and take public transportation to replace the trips that I took in my car. The extra time it took to get to my destination was more than replaced by the benefits of improved health and money saved. How much money? It turns out to be a lot of money, more about this later.

My new transportation strategy was so effective I was hardly using my car at all. One day I went to get gas and had to break the gas cap cover because it had frozen shut from lack of use. Time to sell the car.

I sold the car over two years ago for $4,000. I don’t miss it for a second and feel really good about it for several reasons. The money from the sale was just a bonus.

It wasn’t until later that I discovered what the true costs were and how much I’m saving by not owning and driving a car.

The True Cost of Owning and Driving a Car

Owning and driving a car has several costs, both direct and indirect. Direct costs are paid directly out of your budget and include gas, insurance, etc. Indirect costs are the hidden costs of driving that affects everyone. These costs include fees, taxes, health, environmental, etc.

Curious about how much it might be costing you to drive? View a complete description of the typical costs and read supporting documents, or plug your numbers into a calculator that lets you to see what your costs are based on your driving patterns.

I drove my car an average of 6,300 miles per year. Using the true cost calculator, that means I’m saving over $6,000 a year in direct costs and $2,500 in indirect costs for a total of $8,500 per year.

The average American drives around 12,000 miles per year with a direct cost of $11,520, an indirect cost of $4,680, and a total cost of $16,200.

What’s the true cost of your car?

What if You Absolutely Have to Have a Car?

Fortunately for me, Portland has many transportation alternatives. It’s notorious for being a bicycle friendly city. It has good public transportation and lots of local communities within walking distance.

However, the further outside of the city you get, the less transportation options there are. This is true for most suburban housing developments. The reality is, for most people, it’s not possible to go completely car-free for many reasons. But even facing those realities, it’s still possible to reduce the costs of car ownership and the number of miles driven.

Look for ways to reduce driving or downsize your car budget. Use all of the alternative transportation options you can to offset the need to drive. Be creative and save money.

Alternative Transportation Options

There are many alternative options for transportation. They may not be as convenient as using a car but they can be a fun and healthy way to save money.

The following is just a few ideas for transportation alternatives. See which ones you can use.

  • Walk – For round trips around 1 mile, walking is a great way to get around and is a very healthy activity.

  • Bike – This is a fun way to get around and can extend your range by miles. Combine biking with public transportation and you can go very long distances for very little money.

  • Electric Bike – This is as fun as bicycling with the benefit of being able to haul more cargo and smooth out the hills using less effort. After the initial cost of the e-bike, they are a very economical mode of transportation. I use my eBikes for everything and this is an effective car replacement.

  • Public transportation – Let someone else do the driving. You can relax and catch up on your reading. Walk at the start and end points. Get some fresh air and exercise too.

  • Share a car – Have a one-car household, and share a car between friends and family.

  • Carpool – Take turns driving. Sleep or read instead of driving every day and use less gas.

  • Telecommute – Make arrangements with your current employer or find a job where you can work at home a few days of the week or even full time.

  • Economy car – Get a smaller, more fuel efficient car with lower insurance rates.

  • Car rental – Rent a car when you need one instead of owning. There are many rental car services that offer reasonable rates. There are services like Zip Car that make renting a car very quick and convenient.

  • Truck or SUV rental – Rent a truck for a day and combine all of your truck activities into one rental then be done with it. No need to drive all of that cargo area around if you only use it once in awhile.

  • Shop online – Have items delivered directly to your home, sometimes for free.

Can you think of others?

Conclusion

My motivation to eliminate my car was for personal reasons. The accidental savings of the true cost of driving and owning a car was a pleasant surprise.

There are many alternatives to driving. If you want to save money, avoid the urge to hop in the car and drive, and take advantage of the alternatives instead. You can save a lot of money.

Dan Woodard writes for ElectricBikeBuilding.com, where he shares all the details of his electric bike projects. Stop by his site to say hi, and learn how to make an electric bike.

Posted in How to Save Money on 09.10.10 with 20 comments.

20 Responses to “How I Accidentally Saved Over $8,500 a Year with My Car”

  • Kevin says:

    I work from home so me and my girlfriend share 1 vehicle. I’m really happy about that because we save a lot of money on insurance, gas, and car payments. I really couldn’t see her taking public transportation because she uses the vehicle for work. The good thing is she gets paid mileage for that. When I used to work close to home I would walk to work and that saved me tons back then. Great ideas.

  • Dan Woodard says:

    @Kevin – It sounds like you’ve already trimmed your car budget nicely. Working from home is a great way to go.

  • Squirrelers says:

    I like this post, you provide some good potiential alternatives to driving. Additionally, you point out other benefits beyond just the finances.

    I now live in a suburban environment, but when I lived in the city (Chicago), I throughly enjoyed walking and taking the El (elevated train) throughout the city. Not as much in winter, of course, but most of the year it was great. It wasn’t even about the money, moreseo the feeling of getting invigorating excercise and fresh air.

    Now, I must drive, given the suburban location in which I currently live. Life has changed, with kids. Regardless, while driving needs to be my primary mode of transportaion, I try to take a train to work once in a while. It takes me up to 30 minutes longer each way doing that, which is why it’s not an everyday approach. But I don’t have to put mileage on my car, it’s less stressful, and I can walk to/from the train station to work while getting some exercise and fresh air. It’s a good change of pace.

    For weekend or local transportaion, the car is my only way.

    Anyway, thanks again for a really good post!

    • Dan Woodard says:

      @Squirrelers– Thanks for the compliment. Getting out in the fresh air and exercise is one of my favorite side benefits of not driving a car too.

      You and many others have the same issues with the suburban environment, families, and daily transportation needs. I’m not sure what a complete solution is but until there is one, the only thing you can do is optimize the alternatives as best you can. It sounds like you are.

  • I’m really torn on your argument for not having a car…

    I see both the savings and green factors in not having a car and I applaud you for them. In fact, if I were single (or married without kids) and lived in a big city, I don’t think I would have a car myself…

    But in my case, I live in a smaller satellite city. We have 2 kids that are in multiple sports programs at the same time. My wife works part-time as a bookkeeper. Grocery loads are very large…

    So for us, we have to have two cars (hmm, perhaps this is a hidden cost of living in a small city)… Then there is that “just in case of an emergency” reason, the same reasons why we still have a landline phone (which as you can guess I hate)…

    I was able to convince my boss to let me telecommute one or more times a week. And I have an arrangement with a co-worker that everytime gas goes above $3 dollars, we carpool.

    You have some great savings, and I’m envious, but the cars in my family are no longer wants, they are more on the needs category…

    • Dan Woodard says:

      @Money Reasons – I totally understand and hope someday that there will be better alternatives that address those needs. I think telecommuting is a fantastic way to reduce driving with many other side benefits. I’m happy that your company understands the productivity gains that can be had by allowing this. It’s good on your finances too.

  • Unfortunately, my lifestyle doesn’t lend itself to getting rid of my car. I work 17 miles away from home with no real public transportation options, I take a highway to get to church, and I don’t live near anyone that I work with.

    However, I’m from a huge city and many people got along fine without a car. As you said, ditching your car can save you thousands of dollars! I always caution someone when they talk about getting their first car – it’s hard to go back once you get used to driving.

  • Hey! Thanks for this. I got into a car accident last week and it looks as if my car gave up her life to save mine. I’ve been debating the option of going without a car. I work in Los Angeles, which has horrid public transport, but am blessed with the rare treat of having pretty much door to door train service. But as for getting around where I live? Oy. The public transport is AWFUL.

    However, I keep reading all these positive things about living car free and I’m thinking…hmmm, maybe it’s time for an experiment? Thanks so much for this. Couldn’t have come at a better time.

    Oh, and according to the calculator, my actual cost of driving annually is $19,249.50. HOLY CRAP!

    • Dan Woodard says:

      @ConsciouslyFrugal – Sorry about your accident. It does sound like an opportunity though. Good luck with your experiment. It could feel liberating after the adjustment.

  • Earl says:

    Thanks for this post! It can be difficult to convince ourselves to walk/bike/use public transport instead of drive but if we can be motivated to try it even once, we’ll often find that it becomes quite addicting…

    For the past year I’ve been living in Mexico and was originally ‘lucky enough’ to have been given a car by a friend. But in the end, I rarely used it, mostly due to the realization of the costs involved just to maintain it. Once I began using buses and walking more often, I was hooked and it’s almost become a hassle to drive somewhere! I try to avoid using my car as much as possible, and of course, this leads to the savings that you mentioned.

  • My dad lives in Portland and two decades ago he biked everywhere. When I lived in the big city we didn’t have a car for three years, and used our bikes, or public transportation every day. It was definitely a simpler lifestyle. We chose to move out to a rural area and buy some land, and I am still glad we did.

  • Max says:

    I lived in Miami and commuted by bus and bike every day, sometimes with a 2+ hour commute each way. Although I saved money on not having a car and did enjoy the solitude of the ride sometimes, it was definitely exhausting, especially knowing the same car ride to work would have taken 30 minutes. I now live in a smaller community and own an older Honda Civic, which is a pretty thrifty vehicle overall, and I still like to ride my bike when possible, so I don’t think my vehicle costs are too high.

    I think it all comes down to your particular situation, where you live, how far you need to commute for everything, and what you’re willing to sacrifice to save money by not having a car.

    Not having a car in certain cities and rural areas can require a ton of patience, plus you have to accept that you can’t do everything that you want when you want, unless you’re willing to spring for a cab sometimes or have friends with cars.

    However, if you live and work in the right area, it can really create an excellent lifestyle that saves you money and some headaches too.

    • Dan Woodard says:

      @Max – I had a similar experience with biking. It was a bit much some days and exhausting. When I switched to an electric bike, it was easy with the fun of biking too.

  • Forest says:

    I have never owned a car and can never imagine owning one….. However I can see how the convenience sets in once you do.

    Walking is my main tool and riding a bike when in USA or UK (Doesn’t work so well in Egypt).

    • Dan Woodard says:

      @Forest – I’m impressed. I can’t recall meeting anyone who has never owned a car.

      Pardon me for asking but why doesn’t biking work so well in Egypt?

  • FinCar says:

    Taking the alternatives offers an amazing reduction to your budget. Practicality proves to be the most effective way in financial success. Taking an option especially to instances that requires minimal travel will cause you a lot of savings. Good thing to consider other functions as well.

  • Jerry says:

    You’re lucky that Portland is so progressive about transportation. Not everyone is so lucky. Owning a car is expensive with repairs, gas and insurance. I actually don’t have one and use public transport and taxis. It’s a pain sometimes but I make it work. And, it does lead to better health.

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