Our 1997 Saturn station wagon has reached 13 years old, the average age at which a private motor vehicle in the U.S. is scrapped. On that basis, and with some pretty comprehensive (exceptions below) records on spending, I can tell you what it cost my family in today’s dollars: $67,658 in total, or $5,200 per year, or $434 per month, or 80 cents per mile. That isn’t the typical cost of having a car in Brooklyn; it may be fairly described as the minimum average cost. We don’t use the car to go to work or school, and only average around 6,500 miles driven per year, which not only reduces variable costs such as gasoline and tolls, which in any event are merely 19.1% of the total, but also cuts the cost of insurance. We also have a clean driving record, qualify for every insurance discount out there, and went with liability coverage only after four years. We don’t pay to park, although we have gotten parking tickets despite doing our best to avoid them. And the car itself is small, fuel thrifty and bought stripped with a manual transmission and no AC. Even so, the cost of having our own car has been a significant part of our total budget. Was it worth it, and what are the alternatives?
First, a few notes on the attached table. I keep track of our spending by category from our credit card bills and checkbook. So any compilation of spending excludes spending in cash, which is simply counted as such, and thus excludes the quarters we’ve put in parking meters over the years and the twice a year car wash – not much money. It is possible that we may have purchased gas with cash once or twice, but having lived in New York back in the day, I only carry “mugger money” and generally put all my spending on the credit card, paying it off at the end of the month. So I’m pretty sure I’ve captured everything else.
The largest cost category is the purchase and major repair of the car itself, for a total of $29,116, $2,240 per year, or $187 per month. The purchase price of just over $15,000 in 1997 is worth $20,400 in today’s money; new tires, batteries and other repairs and replacements have added another $8,700 over the years. According to Edmunds.com, I could sell the car today for $1,000, so I deducted that from its cost. One might conclude that by keeping it, I am now “spending” $1,000 – plus the probably increasing cost of repairs – to keep it. The cost of this purchase was less for us than for most, because we saved up before purchasing rather than having to borrow and pay back with interest. For the average U.S. household, according to the Consumer Expenditure Survey from the BLS, finance charges add about $300 per year to the cost of motor vehicle transportation. That is the cost in recent years, in a historically low interest rate environment in which 0% interest for a time has been a common incentive.
Insurance is the second largest cost category, at a total of $21,150, $1,627 per year or $136 per month. We switched carriers once in the period, saving about $275 per year. It is worth noting that we had owned a used Plymouth Horizon hatchback for six years before buying the Saturn, so we were out of assigned risk throughout the Saturn period. The cost of insurance in Brooklyn is higher than just about anywhere else, in part because of extensive fraud, in part because of fraud by those who register their vehicle elsewhere to avoid paying their share of fraud by others. There are virtually no consequences for insurance fraud in New York. For the insurance companies fraud is profitable, as it increases the total dollar volume that they profit by extracting a percentage on, so no one is pushing to curb it.
Between them, (relatively) fixed costs such as the purchase of the vehicle and insurance accounted for nearly three-quarters of the total cost of ownership. Gas and tolls are a pittance in comparison. That is why carpooling based on “leaving your car at home” hasn’t really caught on, because you don’t really save much. Carpooling will only catch on, as I have discussed previously on this site, if done on a mass scale, for all trips rather than just work trips, with the riders paying the driver the equivalent of a transit fare, and the riders able to avoid the total cost of having a car (or an additional car in the family) altogether, not just the variable cost of one trip.
Gasoline, accordingly, has cost us only about $6,200, or $477 per year, or $40 per month. Some months I don’t buy any gasoline at all, with much of the spending on multiple fill-ups on long trips out of the city. It would be more, of course, if I owned an SUV and drove it 20,000 miles per year. According to the Statistical Abstract of the United States, by the way, the average miles driven per year for a U.S. automobile is about 12,300, or just under double our average. We maintained the car aggressively, one reason perhaps it has lasted so long, at a cost of about $3,320, $255 per year, or $21 per month.
Taxes (when tabulated separate from taxes included in the cost of gasoline and other purchases), fees, and fines cost about $3,450 during the life of the car, with the sales tax on the car purchase a big chunk of it. One year I didn’t have any fees or fines, as I forgot about the annual inspection until the city’s $55 reminder service helped out. Tolls cost about the same amount — $3,425 in total, or $22 per month. Against these public costs, there is the private benefit I have extracted by parking for free on the street. That doesn’t just save money compared with those who pay for off-street parking, but also compared with those who have their own “free” off-street parking, which in reality costs them in property taxes, construction (or housing purchase) costs and maintenance.
There are some costs not covered in the tabulation above. A couple of times we ended up renting a car despite owning one, requiring a mini-van to take a big group of kids to places like Sesame Place and Great Adventure. The Saturn Wagon is a pretty flexible vehicle, but it only seats five; by owning you are limited to one type of vehicle that may not suit the purpose of an individual trip. In addition there is all the time spent taking the car t be serviced, a burden that in my family falls to me.
Also falling to me – the ever-rising time spent searching for parking for alternate side of the street. Some time in the past decade, street sweeping in Windsor Terrace switched from Thursday/Friday to Monday/Tuesday. For someone who generally only uses the car on weekends, and has to have it legally parked before traveling to work some other way on Monday, that switch was painful. I generally park several blocks away when returning from out of town on Sunday, often after spending 20 minutes or more looking for a legal spot. These days if a local trip that doesn’t work well for transit is required on a Sunday or Monday, after we are legally parked, we end up paying for car service even as our own car – which is costing us $14.25 per day — sits there unused. We can’t afford to give up that legal parking space.
Parking has also been a source of tension on the block as one family – since moved away – had multiple cars and generally parked in a way that occupied two spots in order to save them. At once point, someone dropped a flyer in everyone’s mailbox objecting and suggesting that the rest of us work against them.
Although an automobile is for us a source of utility not identity (although I must say owning a Horizon and then a Saturn does satisfy my sense of uncool), the parking situation has left me obsessing over it as much as a motorhead. Another obsession: traffic. I rush the family out of bed to leave before 7:00 am on many trips out of town to avoid it. On the way home I listen to the traffic report, not music, and constantly calculate alternative routes. Yesterday, returning from a friend’s daughter’s Bat Mitzvah in northern NJ, I decided to check out the Mets game and let my wife listen to WNYC instead, and thus didn’t hear about the Route 7 Detour and Holland Tunnel back-up. That error cost us 90 minutes added to a one-hour drive.
Since we don’t really need a car for daily use, we did consider not having one, living as some friends of ours do. Without one we would have had to rent cars for trips out of town, used car services for some other trips, and taken some additional transit trips. Some trips that take a long time via mass transit – the annual trips to Riis Park for a day at the beach or Dyker Heights to see the lights and eat at a diner – may not have seemed worth it at all if the car wasn’t just sitting there. Although in the past three years I have gone to both places by bicycle.
Guesstimating how much the additional car rental, car service and transit trips would have cost us, I predicted in 1997 that having our own car would be only slightly more expensive. So we bought it. That was based on our own car costing less than $300 per month, and perhaps less than $250, in $1997. One reason I’ve kept careful track of our automotive costs was to see how that decision worked out. The actual cost to date is $323 per month in $1997, more expensive that we had estimated, although that amount could fall if the car lasts a few more years without excessive repair costs. I’m hoping for three years (total 16), and would be thrilled with five (total 18), though the car could face a massive repair bill that is not worth paying at any time.
So when it wears out do we replace it, or live without it? I’m always looking for ways to cut the cost of living without decreasing the quality of life, and the car looks like the fattest remaining target, particularly in a few years once the kids have moved on.
One remaining concern is the cost and availability of rental cars, particularly on holidays. Some years ago, the federal government forced the repeal of a state law that allowed rental car companies to be sued in cases where the person who rented had committed a crime, a law defended by (among others) Sheldon Silver. This, repeal opponents asserted, would cut the cost of renting in places like Brooklyn. Did it? There was never any follow-up; interest groups tend to make up “facts” to support their interests before a public policy decision but no one ever checks afterward. Another concern is – will a car be available to drive to the relatives outside the city on holidays? Thus far Enterprise’s website showed a car available a week before Easter Weekend for that weekend; Zipcar did not respond specifically but sent an e-mail saying that in general cars are available. I’ll keep checking around the calendar over the next couple of years. Obviously, everyone can’t live without a car and all try to rent one on Thanksgiving.
A second remaining concern is the fact that as Americans, my children will probably have to learn to drive eventually. I asked my insurance agent what it would cost to add one well-behaved daughter to our policy, and the answer was a shocking $1,800 per year. So I told her that she could get a license – if she managed to earn that much over and above any other money she wanted to spend, and pay for the insurance. She said no, but was none too pleased with my requirement. In another year, I’ll ask what two well behaved daughters would cost — $1,800 or $3,600? Perhaps I could stomach $900 per child. The cost would be lower when they are 21, but the car is unlikely to last that long, and I would be faced with buying another just so they could learn to drive. And not admitting to the insurance company that they are driving is not an acceptable option in my family.
How do other teens, particularly in families that don’t have as much income as we do, start driving in Brooklyn? What about boys? Do they ever think about what else they could do with the money? Are they nuts?
On thing is certain – everyone else in New York City, and particularly those residing in Windsor Terrace, would be better off if we didn’t replace our car, and stopped competing for scarce street space. If anyone is interested in how to tip the decision, I have some suggestions. Anything that increases the availability and decreases the cost of rented and shared cars, starting with a zoning amendment now being considered that would allow them in required parking in middle density residential zones, would make it easier and thus more appealing for use to live without our own car. So would bicycle parking at rental car locations, to make it easier to get there to pick them up and get home after dropping them off. A charge to park overnight on the street dedicated to improved street and sidewalk maintenance, even as modest as $10 per month, might convince me that “rent” was being paid in exchange for my giving up “my” share of public space. And limiting the available parking permits to those whose cars are licensed and insured in the neighborhood would provide some measure of karma against the fraudsters who have been avoiding paying for their share of Brooklyn’s insurance fraud by shifting the cost to me all these years.