How Much Your Car Really Costs You and The Quality of Your Living
There are neighborhoods and then there are great neighborhoods; neighborhoods are the cul-de-sac communities you find out in the suburbs, great neighborhoods are the moderately dense, diverse, unique parts of the city that are so entwined with the way cities operate the neighborhood almost seems natural, like it has been there for thousands of years. Those great neighborhoods not only provide a greater sense of community and therefore are generally a much better place to live, but are also a carbon efficient way to live. One large reason a lot of people do not live in great urban neighborhoods and instead move out into the suburbs, is because they cannot afford it. However, these people fail to realize, that the car they drive is the thing which is keeping them from being able to afford that great neighborhood. Theoretically it’s simply based on the bid-rent-theory which states that the further out from a cities node land is, land becomes cheaper due to the increased costs in transportation and accessibility. Once you live in that great neighborhood, you can walk to the grocery store, run errands, use public transportation or walk to work and live near your friends and family, the same goes for your kids as well, so your transportation cost go down.
Based on a 2008 study by Experian of American households who own a least one car, those households on average own 2.28 cars. I understand that a family may need one car and that is totally reasonable, but 2.28, well if they lived in that great neighborhood they most likely would not need it. However, they don’t live in the great neighborhood because they cannot afford it but that is because they are analyzing what they can afford based on the fact that they have 2.28 cars. Every year AAA releases the average annual costs for an American to own a car and I decided to take it a bit further. What if you took that annual ownership and discounted it over the life of a typical mortgage, how much is that extra 1.28 cars worth and how much more could they afford to spend on a home in a great neighborhood where they only need one car instead of 2.28.
I doubt the average American household considers all these elements and realizes they could afford to spend $186k more on housing if they only had one car, which is sad because those 1.28 cars are probably ruining the quality of their lives a little bit, they just don’t realize it since they don’t live in a great neighborhood. Realistically the present value of getting rid of those 1.28 cars is also probably greater than $186k, annual car cost are not going to stay flat at ~$11k, they will most likely rise, therefore the present value savings of getting rid of those cars is even greater but trying to forecast 30 years of inflation is a path I don’t want to wander down.
So get rid of that car and go live somewhere great!