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Home » Auto Ownership, Save Money, Summer of Saving

Serious About Savings? Get Rid of your Car

Last updated by on 27 Comments

Two weeks ago marked the 5-year anniversary of my wife and going from two vehicles to one.

Up until a month or so prior, the thought of doing so had not received serious consideration. Like many, years upon years of billions of dollars of automobile advertising and 2-3 cars in every driveway led me to believe that every adult has a need for, if not a right, to a vehicle.

As soon as I was old enough to drive, I wanted to throw my life savings towards a car, like just about every other high-schooler. The “cool” kids had cars, the “un-cool” kids did not. Picking up a girl for a date in your parents minivan? Not cool. So I saved up from my jobs as a pancake house busboy and grocery store checkout bagger (do these even exist anymore?) and threw it all towards an ugly, run-down Pontiac Lemans that didn’t have much life left in it. But who cares, I was mobile! It was a right of passage to adulthood. Or so I thought…

5 years after giving up a car, I haven’t looked back at all. We never have to play “musical cars” in the driveway, we’ve saved time on maintenance and cleaning, I’ve rediscovered my love for biking, I’m in much better shape and have found a good stress release in biking, and we’ve been able to easily coordinate transportation needs to the point that an occasional scheduling conflict has never had us seriously re-consider the the move.

But the best part of all has been the cost savings. In fact, I cannot think of another cost cutting measure I’ve made that has saved me more money than getting rid of a second car.

The key, for me to be able to do this, was to strategically find a home that was within 2 miles from work. With a bike, a bus line half a block away, and my feet, I have three ways to get to/from work – making it incredibly easy to make the move.

If you want to cut your transportation costs and total costs, in general, the easiest way to do it is to have less vehicles. Want to cut your housing costs? Downsize your home. Sometimes saving your money is gloriously simple.

Going from two vehicles to one will result in instant savings, even if miles driven (fuel expenses) are all consolidated to the remaining vehicle. Savings you will enjoy will include:

  • get rid of carthe monthly lease or opportunity cost of holding on to a vehicle that is paid for
  • finance charges
  • insurance costs
  • maintenance costs (even vehicles that just sit need regular maintenance)
  • cleaning costs
  • costs for additional parking space (for those in apartments or condos)
  • if you view time as money – time spent on maintenance and cleaning

You’ll have to crunch the numbers to determine how much you personally stand to save. With some back of the napkin math, we can get a rough average calculation:

  • $9,211 in total transportation costs per 2-person household
  • $2,743 of that is fuel (we’ll assume total mileage won’t change – even though it prob. will be lower)
  • $629 is public transportation (we’ll assume that won’t change)
  • If we assume every 2-person household has two cars (back of napkin, I said) and split the difference of what is left (lease/purchase price, maintenance, insurance) – the amount saved by getting rid of second cars would be $2,919 per year, or $243 monthly.

I think that number is actually on the low side. I personally saved about $5,000 annually with the move. That was a pretty big price to pay considering the lifestyle benefit to owning the car was actually negative, not positive.

Speaking of lifestyle, what if you don’t live in a 2-person household and getting rid of a vehicle means you are left without one entirely?

It seems like this is easier than ever to do these days.

More and more professionals want to live closer to urban centers to be closer to their jobs and other downtown amenities. 2010 Census data showed that in 33 of the nations largest 51 cities, urban center population growth is outpacing suburban population growth. Being close to your job makes self-powered commuting much easier.

Public transportation has experienced a resurgence in recent years. 2008 and 2012 marked the first and second highest mass transit ridership year in the last 5 decades (10.5 billion trips in 2012). More ridership leads to increased services.

And when you absolutely need a car? Zipcar is making it easier than ever to get a vehicle nearby, Enterprise will pick you up, and a number of websites focused on peer-to-peer local car sharing are popping up.

It’s not even “cool” to have a car anymore. Just look to the kids on this one. The University of Michigan’s Transportation Research Institute found: “About 87 percent of 19-year-olds in 1983 had their licenses, but 25 years later, that percentage had dropped to about 75 percent. Other teen driving groups have also declined: 18-year-olds fell from 80 percent in 1983 to 65 percent in 2008, 17-year-olds decreased from 69 percent to 50 percent, and 16-year-olds slipped from 46 percent to 31 percent.”

Saving money to fuel your financial independence, on the other hand? That sounds pretty damn cool to me.

Getting Rid of a Car Discussion:

  • Have you gone from 2 cars to 1 or from 1 to zero? Share your story and how much you’ve saved.
  • If you’ve considered downsizing your vehicle fleet but haven’t made the move, what has held you back?

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About the Author
I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 7,500+ others by getting FREE email updates. You'll also find every post by category & every post in order.


27 Comments »
  • We went from 2 cars to 1 last year but only spent about $1,000 less than we had projected we would. I was pretty disappointed we didn’t see bigger savings! We apparently had a pretty deep 2-car discount on our insurance and only spend a bit less on gas now. I think the small decrease in our spending just showed that we were pretty frugal with car costs to begin with and really didn’t need the second vehicle. I’m still glad we made the switch because of non-financial benefits though (more time with my husband during our commute and due to synching up our schedules, better communication).

    I would love to live car-free but my husband loves driving!

  • Kim says:

    I’ve gone through periods without a car (college, graduate school, summer jobs, first job out of school) and loved it – being able to walk or ride my bike to get where I needed was so much more FUN than driving, and I even have a “fun” beachy Jeep!

    Currently we are a 2-car household with a baby coming in 2 weeks, so although I work at home I still see the value in having my own vehicle until the kids are big enough to not need carseats & I can transport them to and fro in a bike trailer.

  • Michelle says:

    We currently have 3 cars, and when I make the switch to self-employment, we will probably get rid of 1. It is hard to say because W flips cars so we will always have at least a couple.

  • Jordan says:

    When going from a car to a new bike. What type of bike would you recommend for the average commuter? I am looking to get a bike and am not sure whether to go with a cheap flat bar road bike or a cyclocross bike. Suggestions on what you ride?

    • Dave says:

      Your question has a lot of variables in it. Do you ride all cement? Could you ride on dirt? How far are you riding? Do you want to carry your bags on panniers (highly recommend), or a backpack.

      As I sometimes take dirt roads home, I bought a cyclocross bike. It holds a rack, can most likely fit fenders (most road bikes will not) and is a lighter bike over a touring bike.

      A road bike isn’t for me as I don’t always stay on the road. Even then, I would highly recommend a cyclocross or touring bike over a real road bike for the comfort of the ride, unless you are communiting a long distance.

      Also consider you will be riding in the winter (as I do), so I didn’t buy a top end bike as I didn’t want the components to rust out (which will happen if you don’t keep it up).

      • Jordan says:

        Thanks Dave. I live in Chicago so there will be all types of weather elements to deal with. My ride would include road and dirt paths.

        I wouldn’t be commuting very long distances but i would also like to be able to use the bike for long weekend rides if I wanted to along with a possible triathlon in the future ( looking to complete, not compete)

        I am leaning towards a cyclocross bike but not sure if it is worth the $1k price tag if I am not going to be doing actual cross racing.

        • Dave says:

          I know this is a money saving site, however as this is the replacement for your car, I would recommend getting the one you feel the best on. I don’t see any reason going on long rides would be an issue. My wife does 40-50miles on her cylcocross. I bought a cheaper cyclocross bike and now regret doing it. The only worry of course is the salt damage, but I found that washing the bike every 2-3 days works as well as keeping the chain lubed.

          • Jordan says:

            Perfect, thanks Dave.

            I was looking at possible bikes in the 800-1200 range which looks like the low end for cross bikes. Is this the range of your bike?

          • G.E. Miller says:

            I will have a post later this week on exactly this topic – so stay tuned!

          • Dave says:

            Jordan – yes that is the price of my bike. I would recommend going the next step up ESPECIALLY if you intend on riding longer distances on it.

  • Sam says:

    I’m a perfect example of some of the trends you mention in this post. I live in Washington DC instead of the Virginia or Maryland suburbs and this whole city is gentrifying with young, well-off professionals at an alarming pace. My work is too far away to bike, but myself and my significant other share a fuel efficient Honda Civic and some days I take the train to my job and they take the car because they need it for work. Then on days when I take the care, they hop on the bus. It saves us a ton of money and all that it takes is a little more communication. My employer even subsidizes public transportation. I can’t imagine owning a second car and having to street park another one and pay all of the associated costs, that seems crazy.

  • Mike F says:

    The trend of laws about graduated licensing or delayed licensing for teen drivers has had quite an impact on their safety (the intent of the law) but also their finances.

  • Tracy says:

    I’ve always been a no car person. It was hard living in Little Rock and New Haven without a car. But I’m in San Francisco now and it’s really not an issue at all. I bike 15 minutes to work. When I want to get out of town I use ZipCar or Getaround. It only cost me 60 bucks to rent a car for an overnight trip to Santa Cruz last weekend.

    I like the idea of having a car for long roadtrips, but for day to day it just doesn’t make sense here.

  • Ben says:

    My wife and I have not dropped to one car for a couple of different reasons. The first is the fact that our local area does not have sufficient public transportation options (I’d assume this is true for many cities across the country). The second is that our home is too far from each of our work locations to make biking a viable option. This comes down to having a viable alternatives to owning a 2nd vehicle.

    Great post though G.E. on the power of not owning a 2nd vehicle (or one at all for that matter).

  • Scondor says:

    Got rid of a MINI and a motorcycle with the arrival of our daughter. Our one remaining car is plenty because my city launched a smartphone app for transit times, so I can easily take public transit to work, or most anywhere. Since I’m not driving, I’m getting a lot more reading done on my commute, but a lot less NPR.

    I also find that if my wife is out with the car I spend less on junk because I can resist what was once a quick trip over to In-N-Out or Home Depot, or both.

  • My wife and I have 3 vehicles. We both work on the opposite sides of the city where public transportation doesn’t get to and we work different times, yet overlapping. We couldn’t work with one car. We did have to try it when my car got hit, but that was extremely difficult and just made us drive more than usual.

    My 3rd vehicle is a project one, but that is paid for and it’s a hobby, so I keep it around.

  • Kyle Rohde says:

    Great thoughts, but one other financial factor to consider is the depreciation on your single car and how much faster you’ll have to replace it.

    If you drive two cars 12K per month each, which is the low end of the average American, you’re now driving 24K per year since we said the total fuel bill wouldn’t change. Let’s also assume you’ll get rid of your car near 100K miles, which is a pretty common number to trade in at. Now, you’re replacing your one car every 4 years instead of every 8, so there’s additional cost to consider there too.

  • RNT says:

    My husband and I were living in DC for a few years with no car, and it was great. When our son was born, we bought a car for peace of mind, but on retrospect, didn’t need it. We have since moved to Montana, which is a much more car dependent state, but have stayed as a one car family, even with the addition of a second little one. I have a bike trailer the little ones go in, which works most of the year (winters are more challenging). I don’t miss the second car at all.

  • J says:

    Have considered it in the past, but have also decided against it, and will share my reasons here. I understand these may not apply to everyone, just as the advice to downsize to a single car doesn’t apply to everyone.
    I work a 15 minute drive away (straight freeway shot) from home. I also work in the “worst” part of town. Not only would biking to work add an absolute minimum of an hour of commute time per day, but I’d be riding around exposed in a relatively high crime area. I much prefer the safety of driving my car straight to my workplace’s parking garage.
    My wife cannot go car-less either. She is in a client-based business, and is driving all over the place all the time. She also has meetings that would conflict with a potential “drop the husband off at work” time, and again with pickup time.
    Certainly not everyone is in this kind of scenario. If you take anything away from this comment, let it be that you should examine your own scenario thoroughly and decide for yourself. Don’t let someone tell you to ditch your 2nd car if you need it, and likewise don’t let someone tell you that you need that 2nd car if its costs outweigh its benefits (even if that “someone” is yourself).

  • Christopher Quinn says:

    Hey Mr Miller

    You are most correct about your budget being very negatively impacted by owning and operating a car! However, once you get into the working world and have a professional career or business you will quickly see that by not having a car limits your abilities to thrive in your occupation!

    Most business professionals are expected to drive to a clients place of business, or be able to have the flexibility of going to a last minute meeting 20 miles from your office. Using a bus becomes very limiting during these types of required business travel needs.

    My wife has a bus pass and swears by the bus! I am not a fan of using the bus… but for her it works and saves me from having to purchase and pay for a seconds car and its operating cost!

    Thanks

    Chris

  • I’d love to give up my car and bike to work! It’s a goal of mine and there are several nearby companies that I could work for. I assume I could save $300 a month on gas.

  • Jake says:

    I never had more than one car – occasionally second one but always from car rental for travelling etc.

    I think buying second car in today market is not the best solution.
    I prefer to rent it when I needed – most rental companies will deliver brand new, clean car to your home for free or for small charge.

    You will save off devaluation cost of your car and spend same money on rentals.
    Rest of the money you can spend on something different like holidays.

  • Great article! My husband and I currently have only one car and we are saving for another. The town we live in does not have public transportation so we have no other options. There are a few people in town that I know who commute back and forth to work on bikes and they rave about how much money they save each week. If only I had the will and patience to do the same. :)

  • Sarah says:

    I saved tons of money in college by never having a car and never driving anywhere – I took public transportation and/or walked to work, home, school, and beyond. I could probably bike to my FT job, but my PT job sends me all over the place, so my car is a necessity in that respect. I am looking to moving into an area where public transportation and walking will get me anywhere I need to go.

    • EmmaPeel says:

      GOOD GIRL! SMART LADY!

      i have never wanted a car and never wanted to drive. after finally giving up driving and my car in 1999, i have never felt so free. buses are wonderful and walking is even more wonderful. if a person is so stupid that he or she cannot understand the costs of an average $20k a year for having ONE card supersede some peoples’ very income, they must totally need another hole in their head to drain out the goo that’s gumming up the works. For each car you have, subtract $20k a year from your annual income. Then you’ll understand why you’re not getting ahead. It’s that simple.

      Take a look at air quality, water quality (you’re destroying both, thanks!) infrastructure quality, insanity of people on the roads, junkyards and all the other BS — not to mention obesity. Now tell me how a car is helping ANY of that.

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