How Much Does Owning a Car Cost Over Your Lifetime? Way More Than You Think
What could you do with an extra $443,800?
How about $1,017,258.63? Or maybe $1,906,060.52?
These are all potential representations of the lifetime cost of owning a car, according to a recent post on Dough Roller. Wondering how they got to these numbers? Here’s an overview.
What Does It Cost to Own a Car?
On the most basic mathematical level, this amount comes from AAA’s estimate that it costs approximately $8,876 per year to own, drive and maintain a vehicle. Assuming you buy your first car at age 25 and drive until you’re 75 -- a total ownership period of 50 years -- that comes out to a straight $443,800 over the course of your lifetime.
But there’s more to consider than just the outright expenses of owning a car.
What Else Could You Do With That Money?
When you start thinking about owning a car in terms of opportunity costs -- i.e. the other things you could be doing with that money -- the numbers get even bigger.
Let’s say that instead of spending your money on cars, you instead invested it at an average annual return rate of 8%. If you did this instead of buying a $20,000 car and driving it for a full 15 years before replacing it, you could amass $1,017,258.63 -- around the amount most financial gurus advise you to save for a fairly comfortable retirement.
Buy a car every five years, and you potentially miss out on $1,906,060.52 in investment returns -- enough for a comfortable retirement and then some (maybe including things like that European vacation you’ve always dreamed of).
Makes that junker you’re currently driving look a lot prettier, doesn’t it?
Could You Give Up Your Car?
Your personal situation may not allow you to go sans car, but the numbers are certainly large enough to make you ask if you might be able to cut back to being a one-car household -- or at least motivate you to hang onto your current car as long as possible rather than getting a new one every few years.
To learn more about these and other savings scenarios, read the full story here.
Your Turn: Would you be willing to give up a car to net these potential savings? Why or why not?
Kelly Gurnett is a freelance blogger, writer and editor who runs the blog Cordelia Calls It Quits, where she documents her attempts to rid her life of the things that don’t matter and focus more on the things that do. Follow her on Twitter @CordeliaCallsIt.