5 ms·

I have owned cars for over 20 yrs so I have a pretty good sense of just what a hole in my pocket the whole thing is :) There are all sorts of costs associated

by Edmond 7y ago

I have owned cars for over 20 yrs so I have a pretty good sense of just what a hole in my pocket the whole thing is :) There are all sorts of costs associated with car ownership beyond mere purchase cost and repairs...things like fines associated with cars that fall more heavily on poorer people...there is just A LOT of cost associated with cars.

hhs 7y ago
You write: "There are all sorts of costs associated with car ownership beyond mere purchase cost and repairs". Service and maintenance is another one. I have colleagues who, overall, like the Uber and Lyft lifestyle, even when facing the occasional cancellations. I'm curious if there are empirical studies done on the overall benefits and costs of owning vs leasing vs ridesharing?
diminoten 7y ago
I don't... understand what you're talking about. Sure there are additional costs to owning a car, but you're not really explaining how they're so commonly ruinous to a person's financial well being. So far all you've given me is a few worst case scenarios, but what about the average scenario? What's the normal car ownership process like in your mind, and how does that average situation teeter so close to the edge of ruin, as you say?
- jogjayr 7y ago
  The IRS allows you to deduct $0.51/mile if you use your car for business. This takes into account all the costs of driving: gas, insurance, registration, depreciation, maintenance and repairs.[1] I don't know if it also takes into account the opportunity cost of having $15-50k sitting in your driveway instead of in an investment. The average American commutes 32 miles/day round-trip[2] (we're not counting other driving). So they're incurring ~$16/day in direct and indirect costs related to car ownership and driving. Over 1 year of workdays, that's approximately $4k in car-related costs. The median household income in the United States is approximately $60k.[3] This implies that the median household spends almost 7% of income just on one car. Most households have 2 vehicles so I'll wager it's more like 10-12% of income. This is also more than the amount households save annually (6%).[4] 1. http://www.mrmoneymustache.com/2011/10/06/the-true-cost-of-commuting/ http://www.mrmoneymustache.com/2011/10/06/the-true-cost-of-c... 2. https://itstillruns.com/far-americans-drive-work-average-7446397.html https://itstillruns.com/far-americans-drive-work-average-744... 3. https://en.wikipedia.org/wiki/Household_income_in_the_United_States https://en.wikipedia.org/wiki/Household_income_in_the_United... 4. https://tradingeconomics.com/united-states/personal-savings https://tradingeconomics.com/united-states/personal-savings
  - diminoten 7y ago
    So? Their entire income is probably tied to that car getting them to/from work, so it is an investment, with returns being their ability to hold their job.
    - jogjayr 7y ago
      Right. But no one needs a $15k car, let alone a $50k one, to get to/from work. If you're counting job income as RoI from a car, why not buy a $7k car? That's far better RoI. And after one has held a steady job for a few years, no one should need to finance a $15k car either. That's where most of the costs of car ownership come from (apart from long commutes) - depreciation, interest payments, and insurance.
      - diminoten 7y ago
        No one needs to wear any clothes at all, or at most a paper bag would do. And yet, here we are...
        jogjayr 7y ago
        > No one needs to wear any clothes at all, or at most a paper bag would do. Clothes aren't optional because of public indecency laws and also because most places don't have perfect weather year-round. A paper bag won't do because it'll rip in a couple of minutes, or not offer enough protection against the elements. Same deal with a plastic bag or anything else that's not real clothing. Being shirtless or barefoot restricts your entry to many establishments, but if you don't care about those places then yeah shirts and shoes are optional. All the same, no one needs to wear expensive clothes. If they cover you up, keep you warm, and keep you employable, they're good enough. For a programmer that may mean free swag t-shirt and jeans, and for a rich banker, a $2k suit. But wearing suits every day would be a pointless indulgence for the programmer and wearing $20k suits every day would also be a waste of money for the banker. (I have no idea how much "high-powered finance" suits cost, numbers are estimates)
benj111 7y ago
"fines associated with cars that fall more heavily on poorer people" Examples? If its a case of Ferraris don't need to pay to park, where other cars get ticketed, fair enough. If its just a case of poor people being more likely to speed, in which case that doesn't seem so reasonable to call out. I'm not even sure if fines in general should be counted as a cost of ownership. You can just pay to park, you don't have to speed, in general it seems like a cost of rule breaking to me. I'm not from the US, so the request for examples was genuine.
- pmichaud 7y ago
  I imagine the person you're asking was talking about fines being regressive in the sense that if a wealthy person receives a $100 fine for speeding or parking violations, it's basically nothing, but the same $100 represents a day or 2 of labor for the working poor and could be ruinous if they are already barely able to pay their bills.
- Edmond 7y ago
  We can start with the fact that fines are not means tested so a speeding ticket for someone driving x miles over the speed limit is the same for a Ferrari driver (likely a rich person) and someone who would having trouble covering a $400 expense (a poor person)...in fact it is known that this type of situation often has a cascading effect on poorer people...lose your license/registration because you can't pay the fine, lose your job because you can't get to work, become even poorer.... The real problem is that car ownership is more or less mandatory in America because of the lack of viable alternative in most cases. Those fines I speak of? I have a lot experience with...in fact for most of my late teens and early 20s I spent thousands in fines for various infractions. Not everyone manages to climbed out of those holes.
- lostlogin 7y ago
  Any fine is an example. $40 to someone on the breadline is a problem. While to someone wealthy it’s nothing. There are people who don’t worry about fines due to their wealth, and just avoid situations that would risk their licence.
  - 7y ago
FabHK 7y ago
One can find Total Cost of Ownership calculators online, eg edmunds.com. A Toyota Camry that costs $25k has a total cost of ownership over 5 years of $40k, or some $670 per month. One could get a pilot's license for that amount and fly an hour per week.
- dependenttypes 7y ago
  That sounds like a lot to me. Our Nissan sunny from 1991 costs around 500 euro/year for us.
  - qes 7y ago
    Including gas, oil changes, insurance, new tires, etc? How many kilometers per year?
    - war1025 7y ago
      I used to keep very close track of my finances and commented one day at work on how much of our money we spent on our cars. Everyone in the office thought that I was being preposterous and that they spent nothing near that on their cars. Nevermind the fact that I drove the oldest car and lived the closest to work. Gas / insurance / registration are costs people just generally don't count into car ownership. Probably part of the reason people are so happy to buy SUVs that get terrible mileage.
    - dependenttypes 7y ago
      1200km/year Yes, including all of these.
      - kgwgk 7y ago
        1200km year is not much (3km/day). The calculation above probably includes ten times as much usage. Edit: apparently the edmunds.com calculator assumes 15000 miles per year which are 24000 km, 20 times your 1200km.
mikeash 7y ago
Avoiding fines is pretty much trivial. It’s insignificant compared to the cost of maintaining and fueling the car unless you’re incredibly irresponsible.

by Edmond 7y ago

hhs 7y ago

You write: "There are all sorts of costs associated with car ownership beyond mere purchase cost and repairs". Service and maintenance is another one. I have colleagues who, overall, like the Uber and Lyft lifestyle, even when facing the occasional cancellations. I'm curious if there are empirical studies done on the overall benefits and costs of owning vs leasing vs ridesharing?

diminoten 7y ago

I don't... understand what you're talking about. Sure there are additional costs to owning a car, but you're not really explaining how they're so commonly ruinous to a person's financial well being. So far all you've given me is a few worst case scenarios, but what about the average scenario? What's the normal car ownership process like in your mind, and how does that average situation teeter so close to the edge of ruin, as you say?

jogjayr 7y ago
The IRS allows you to deduct $0.51/mile if you use your car for business. This takes into account all the costs of driving: gas, insurance, registration, depreciation, maintenance and repairs.[1] I don't know if it also takes into account the opportunity cost of having $15-50k sitting in your driveway instead of in an investment. The average American commutes 32 miles/day round-trip[2] (we're not counting other driving). So they're incurring ~$16/day in direct and indirect costs related to car ownership and driving. Over 1 year of workdays, that's approximately $4k in car-related costs. The median household income in the United States is approximately $60k.[3] This implies that the median household spends almost 7% of income just on one car. Most households have 2 vehicles so I'll wager it's more like 10-12% of income. This is also more than the amount households save annually (6%).[4] 1. http://www.mrmoneymustache.com/2011/10/06/the-true-cost-of-commuting/ http://www.mrmoneymustache.com/2011/10/06/the-true-cost-of-c... 2. https://itstillruns.com/far-americans-drive-work-average-7446397.html https://itstillruns.com/far-americans-drive-work-average-744... 3. https://en.wikipedia.org/wiki/Household_income_in_the_United_States https://en.wikipedia.org/wiki/Household_income_in_the_United... 4. https://tradingeconomics.com/united-states/personal-savings https://tradingeconomics.com/united-states/personal-savings
- diminoten 7y ago
  So? Their entire income is probably tied to that car getting them to/from work, so it is an investment, with returns being their ability to hold their job.
  - jogjayr 7y ago
    Right. But no one needs a $15k car, let alone a $50k one, to get to/from work. If you're counting job income as RoI from a car, why not buy a $7k car? That's far better RoI. And after one has held a steady job for a few years, no one should need to finance a $15k car either. That's where most of the costs of car ownership come from (apart from long commutes) - depreciation, interest payments, and insurance.
    - diminoten 7y ago
      No one needs to wear any clothes at all, or at most a paper bag would do. And yet, here we are...
      - jogjayr 7y ago
        > No one needs to wear any clothes at all, or at most a paper bag would do. Clothes aren't optional because of public indecency laws and also because most places don't have perfect weather year-round. A paper bag won't do because it'll rip in a couple of minutes, or not offer enough protection against the elements. Same deal with a plastic bag or anything else that's not real clothing. Being shirtless or barefoot restricts your entry to many establishments, but if you don't care about those places then yeah shirts and shoes are optional. All the same, no one needs to wear expensive clothes. If they cover you up, keep you warm, and keep you employable, they're good enough. For a programmer that may mean free swag t-shirt and jeans, and for a rich banker, a $2k suit. But wearing suits every day would be a pointless indulgence for the programmer and wearing $20k suits every day would also be a waste of money for the banker. (I have no idea how much "high-powered finance" suits cost, numbers are estimates)

benj111 7y ago

"fines associated with cars that fall more heavily on poorer people" Examples? If its a case of Ferraris don't need to pay to park, where other cars get ticketed, fair enough. If its just a case of poor people being more likely to speed, in which case that doesn't seem so reasonable to call out. I'm not even sure if fines in general should be counted as a cost of ownership. You can just pay to park, you don't have to speed, in general it seems like a cost of rule breaking to me. I'm not from the US, so the request for examples was genuine.

pmichaud 7y ago
I imagine the person you're asking was talking about fines being regressive in the sense that if a wealthy person receives a $100 fine for speeding or parking violations, it's basically nothing, but the same $100 represents a day or 2 of labor for the working poor and could be ruinous if they are already barely able to pay their bills.
Edmond 7y ago
We can start with the fact that fines are not means tested so a speeding ticket for someone driving x miles over the speed limit is the same for a Ferrari driver (likely a rich person) and someone who would having trouble covering a $400 expense (a poor person)...in fact it is known that this type of situation often has a cascading effect on poorer people...lose your license/registration because you can't pay the fine, lose your job because you can't get to work, become even poorer.... The real problem is that car ownership is more or less mandatory in America because of the lack of viable alternative in most cases. Those fines I speak of? I have a lot experience with...in fact for most of my late teens and early 20s I spent thousands in fines for various infractions. Not everyone manages to climbed out of those holes.
lostlogin 7y ago
Any fine is an example. $40 to someone on the breadline is a problem. While to someone wealthy it’s nothing. There are people who don’t worry about fines due to their wealth, and just avoid situations that would risk their licence.
- 7y ago

FabHK 7y ago

One can find Total Cost of Ownership calculators online, eg edmunds.com. A Toyota Camry that costs $25k has a total cost of ownership over 5 years of $40k, or some $670 per month. One could get a pilot's license for that amount and fly an hour per week.

dependenttypes 7y ago
That sounds like a lot to me. Our Nissan sunny from 1991 costs around 500 euro/year for us.
- qes 7y ago
  Including gas, oil changes, insurance, new tires, etc? How many kilometers per year?
  - war1025 7y ago
    I used to keep very close track of my finances and commented one day at work on how much of our money we spent on our cars. Everyone in the office thought that I was being preposterous and that they spent nothing near that on their cars. Nevermind the fact that I drove the oldest car and lived the closest to work. Gas / insurance / registration are costs people just generally don't count into car ownership. Probably part of the reason people are so happy to buy SUVs that get terrible mileage.
  - dependenttypes 7y ago
    1200km/year Yes, including all of these.
    - kgwgk 7y ago
      1200km year is not much (3km/day). The calculation above probably includes ten times as much usage. Edit: apparently the edmunds.com calculator assumes 15000 miles per year which are 24000 km, 20 times your 1200km.

mikeash 7y ago

Avoiding fines is pretty much trivial. It’s insignificant compared to the cost of maintaining and fueling the car unless you’re incredibly irresponsible.