From Michelle Aquino:

 

> I work in insurance (the mathy / anslysis side), keep detailed

> records of expenses each month (so know how much my car

> that I would have kept as a commuting car had been costing

> me), made a detailed analysis comparing keeping two cars

> and only having one, and believe I thought of every financial

> aspect involved. 

 

Michelle has a much shorter commute than I ever have had, even when I was commuting on the train, it was more than 2.5 miles to the train station. :)  And yes, the length of commute is a major factor.

 

However, it is wrong to include maintenance as part of an "extra" cost of owning a second car.  Most maintenance costs are incurred on a per mile basis and usually (since maintenace is also a function of the amount of work done) are more per mile on larger vehicles of the same make (but obviously vary depending on model, etc). 

 

Generally, the only "fixed" costs (those you incur whether you are driving it or not) for a vehicle are insurance (and not always that because cost of insurance does go down if you drive less, at least it does with my insurance company, and if you have a "multi-car discount"), registration, and cost of capital (not the same as purchase price, purchase price is much more a variable cost than a fixed cost, and in fact, usually the cost per mile for the purchase price for commuter car is much less than for a truck), oh yeah and storage (so if you have to pay to park it somewhere, then this is a cost to take into consideration).

 

I currently save myself about $50 per week in gas money by driving my commuter car instead of my truck ($2500/year)

I save myself about $250 per year in regular maintenance (oil changes, etc. which would be less if I did this stuff myself, but my truck takes twice as much oil as my car does)

I save myself about $200 per year in tire wear

I am pretty sure that the other maintenance costs for my commuter car are cheaper than for my truck, but don't now how much and cannot really calculate it since the current "repair" costs that I incur for my truck are for a truck that is used only as a tow vehicle and so are higher per mile than if I were to use it for commuting as well.

 

Even so, $4000 per year in gas, purchase price, and routine mainteneance costs MORE than pays for the $400 per year in extra insurace and the $50 per year in extra registration.  I don't have to pay to park, and the annual average cost of capital on the purchase price is about $30 (I don't get all the good of a return on my money and I have paid cash for all my vehicles).  I spend an extra $500 per year to save myself $4000 per year.

 

If your commuting mileage is less than mine (which for most people it is) but even if your commute is only 12 miles each way that comes up to about 7500 miles per year (I added a bit for trips to the grocery store etc.) your savings may vary; however, I am willing to bet that for most people it is cheaper to operate a small car than it is to commute in a tow truck.  Better for the environment too.

 

If, on the other hand, what makes a bigger truck and a small car unafordable is the bigger truck, then it is the tow truck you cannot afford, not the commuter car.

 

kat

Orange County, Calif.

:)