Cost of Car Ownership

Monthly Mustachian Fail – Car Ownership

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The Kiwi and Keweenaw household leads a pretty lean life, but we make so many mistakes and non-optimized choices! This drives us two engineers crazy, but happiness also fits into the optimization calculator, which is a qualitative not quantitative measure. While there are many mustachian fails to discuss, this month I’m going to attach some low hanging fruit: car ownership.*Insert face punch here*

If you aren’t familiar with Mr. Money Mustache, go check him out. He (along with Early Retirement Extreme) started the financial independence/early retirement Internet craze.

Current Car Situation

Challenge Everything
Successfully car camping out of the Chevy Cobalt! It even drives down dirt roads in the UP!

We own not one, but two fully functional vehicles. Here’s our vehicles, approximate purchase price, details and current mileage:

  • 2006 Chevy Cobalt, $5,500, paid cash, ~85k miles
  • 2010 Chevy HHR, $12,000, financed at low APR, ~95k miles

Can you tell we are from Michigan? Both cars are paid off now, but before we found FIRE we were slowly paying off the HHR.

They are both small vehicles, but have good tires and do fine in the snow. You need good tires to drive through snow (and patience), not a giant truck!

We carpool to and from work, so most days only one car is driven. We try to incorporate errands, seeing friends, etc. into this commute so we don’t take the cars out for just one errand at the time and minimize wasteful driving. We used to just go window shopping on weekends or evenings when we were bored (seemed less lazy than watching TV), now we don’t do that, which has greatly reduced our gas usage.

Cost of Car Ownership

I’ve tracked our spending for a few years and have summarized our spending below. In 2015 we finished paying off the car loan, so those numbers are high because of that. This includes spending on insurance, registration, maintenance, and gas.

  • 2015: $5,540
  • 2016: $2,510
  • 2017 (ytd): $2,030

In total we have spent $10,080 over three years to own and drive our two cars! That’s an annual cost of car ownership of roughly $3,400, which is over 10% of our annual spending!

It is nice to be able to just get in our car and get where we want to go, but there is definitely room for optimization, and we’ve considered downsizing to one car.

A one car household would not have half the costs, since we get a bundled insurance discount, but we would knock almost $1,000 off the top. We’d also be challenged to get off our lazy backsides and bike more.

Mr. Money Mustache Car Recommendation Review

To dive a little deeper than to just say car ownership is bad, I pulled up a classic article, circa 2011: Car Strategies to Cut your Costs in Four or More. Even the MMM family owns a couple of cars with only two  drivers too.

Rule 1: Don’t Borrow Money to Buy a Car:

FAIL, we paid cash for one, borrowed for the other since we wanted to use our cash savings as a down payment on our house. We don’t have any auto loans currently, and don’t plan to get any in the future.

Rule 2: Buy a Car that Does Whatever you will Use if for the Most:

PASS, our cars are mostly used to transport Mr. Kiwi and I. We own two small cars: one hatchback and one coupe. They are definitely not overkill.

Rule 3: Cars are for Inter-City Travel, Not for Trips to the Store:

FAIL, sure we don’t work in the city we live in, but that is by choice. We use our cars at least five days/week.

Rule 4: Don’t Just go Pick up your High Schooler 1 Mile Away:

Doesn’t apply to us. Maybe a pass, since we don’t ever just run out real quick to pick up one thing.

Rule 5: Optimize your Two Cars:

Pass, both cars are small! We have transported a king size mattress and two box springs in the HHR. We’ve also picked up full size sheets of drywall, lumber, an old school table saw, etc. We pack this car to the max and use ratchet straps to do so! Occasionally, we buy a friend beer and dinner to use his trailer to get big stuff (like all the fence materials).

Rule 6: You Don’t Look Funny Driving a Small Car

Pass, we drive in our coupe all the time and make our friends pile in the back 🙂 Both our cars are small, but it sure makes buying tires nice and cheap! Fixing the small cars is much cheaper than fixing a giant truck. We save on gas and maintenance! You have to think beyond the purchase price.

Rule 7: Cars Cost Money per Mile not Per Month

Fail, while we’ve reduced our driving in theory, I’m not seeing it in the numbers. We drive almost every day. Summer is almost over and we only biked to work round trip one day!

When you think about the cost of car ownership, realize that the fewer miles you drive the more years the cars will last, the fewer oil changes, new tires, brake replacements, etc. I don’t get joy from driving, and I definitely don’t derive joy from spending money on my car, so I’d prefer to minimize this. Many of my engineer friends disagree, and hey, if you love your fancy car, go out and get it if you can afford it. All I’m saying is that cars are not our priority.

Optimized Car Ownership Route

If we were to truly optimize our cars, we would probably make some other life optimizations. We could fairly easily go down to one car, but there are a few reasons we haven’t pulled that trigger:

The two cars and two dogs! With the free housing experiment house in the background! You don’t need big cars to fit two people and two dogs!
  1. Laziness, neither of us has sold a used car and we can’t find the title to the coupe. Having two cars is convenient and there is a barrier to sell the car. This isn’t something that will be done in an hour or two, like cutting cable. But this is a major excuse! *insert another face punch*
  2. 10 mile bike commute to work in winter, the nice trail that we could use to bike to work if needed is not maintained in winter. So we’d then be stuck on roads that don’t get much bike traffic for ten miles. While biking in the winter is totally possible, we aren’t that tough yet. *insert another face punch*
  3. Neither of us love our jobs and the two cars gives us flexibility since we may not always be able to commute together. Both cars are paid off, don’t have great resale value, and won’t lose much more value in the next few years. The security of having two cars is nice as we apply/hunt for new jobs.

If we went down to one car, it would help increase our communication (can’t just steal the car for the weekend without running it by our partner).

Our Plan: Carfree or No?

We are working to optimize happiness, but I’m not sold on the two cars contributing much to that optimization equation. Definitely one car helps increase our happiness, but two is probably punch in the face worthy.

The environmentalist in me loves the thought of going car free. Cars are gas guzzling, resource consuming, paycheck stealing conveniences.

In our dream world we would share a couple of cars with the homes on our block. Most of our neighbors are retired and their cars sit idle all day. Only two of the homes we live near have two working adults. Is it time for us to challenge societal norms and propose such a radical idea? Maybe. Should we start with suggesting sharing garbage pick up? Yes (if only we didn’t access free garbage pick up already).


If we assume owning our two cars averages out to costing $3,000/year. We will need to save $75,000 to support this habit ($3,000*25).

Take some time and figure out the annual cost of car ownership for you. How do you stack up to MMM’s advice?

We scored 4/7 and are clearly not as badass as MMM. But that’s not our goal. FIRE is our dream, but we are seeking FIRE optimized just for us! It is fun to daydream about going to carfree and being one year closer to FI!

Is saving an extra $75,000 worth it to us? Maybe. It it worth it to you? Let me know!

8 comments on “Monthly Mustachian Fail – Car Ownership”

  1. Reply

    I’ve a car ownership post coming up, and your post was interesting. But I think you’ve also left out the cost of depreciation. Which is essentially un-realized (unless you sell the car), but it is still a cost. But well done keeping your costs relatively low.
    Good read.

    1. Reply

      So true about depreciation! I don’t count my home or car values in my net worth, so I think of our initial costs (~$18,000) as sunk one time costs. By the time we sell either of our cars we will get <$5,000. Thanks!

  2. I think every Mustachian has difficulty with car ownership! It is hard to change this habit since it is so ingrained in our society. We have considered downsizing to one vehicle too…maybe we will pull the trigger in the future, but for now we like the convenience (as much as I hate to admit that).

    1. Reply

      I’m glad I’m not the only one holding on to an extra car for the convenience!

  3. We are car owners… but we do try to “hack our drives”. The other day, instead of driving to the library, I drove into town and parked at a trailhead and took the trail (via running/walking with the stroller) to the library. It saved me the grief of Saturday “busy roads” (in quotes because Michigan busy is no where near our former southern CA traffic jams!!!) and gave me a workout all in one 😉

    We live outside of town on roads that would be dangerous to bike/walk with a stroller or kid buggy. I’d be happy to do it solo, but with our son, it is not a risk worth taking. But I try to get creative with our driving to lessen the driving need 🙂

    Oh- and two Subarus for us! Northern MI winters are no joke!

    1. Reply

      Yes! Hacking a drive sounds like a great trick! Subarus are awesome cars!

  4. Great post and I’d say you’re a mustachian pass on car ownership. Me… well I passed #4 but only by default as I don’t have a high schooler.

    Ps. Mustachian Fails is possibly the best idea for a blog series ever!

    1. Reply

      Thanks, it’s pretty fun comparing our home to the MMM bar, and recognize that his way doesn’t work for all of us!

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