Rob Carrick of the Globe and Mail recently wrote an article that really struck a chord on the real cost of owning a car. For a lot of families, owning a car is a necessity right there with food, clothing, and shelter. I’m proud to say I’ve lived car-free my entire life, instead relying on my trusty bicycle as my primary mode of transportation. Not only does my bicycle keep me physically fit, I save $6,182.16 a year by traveling on two wheels. I’ve been able to put this money to better use by paying down my mortgage and topping up my RRSP. Let’s take a look how cars and bicycles stack up in total costs.
Cost of Ownership: Cars
Here are some of the most common costs of car ownership:
- Auto Insurance – Your home insurance probably seems like a bargain compared to the premiums you shell out to protect your car. The premiums you pay depend on a number of factors, including your car make and model, driving record, deductible and type of coverage.
- License and Registration – Owning a car is a privilege, not a right. Not only will you have to obtain and renew your driver’s license, your vehicle needs up-to-date license plates and stickers. That means even more moola.
- Fuel – The price at the pumps often has drivers seeing red. Although you can try to drive your car less frequently, you’re ultimately at the mercy gas stations.
- Maintenance and Repairs – Just like your home, your car requires TLC. Skipping tune ups and regular car maintenance can lead to expensive costs down the road. It’s a good idea to have some money set aside for emergency car repairs, as cars have the habit of breaking down at the worst possible times.
- Financing – Most families don’t have a spare $30,000 sitting around to purchase a car. You’ll have to carefully look at car loans and purchase financing to see what makes the most sense.
- Depreciation – It’s often said new cars lose a lot of their value the second they leave the lot. Although not a direct cost, you shouldn’t expect to receive anything near full list price if you resell your car.
So how much exactly does it cost to own a car? Let’s put some dollars and cents on these expenses. Be forewarned that the results may shock you. The estimated average annual cost of owning a modest Honda Civic LX is $6,482.16. Looking for a fancier ride? The cost rises by nearly $2,500 to $8,854.80 if you opt for a higher-end vehicle like the Chevrolet Equinox LT.
Cost of Ownership: Bicycles
Here are some of the most common costs of bicycle ownership:
- Maintenance and Repairs – If you plan to ride your bike rain or shine, five days a week from April to October, proper maintenance is vital. This includes annual spring tunes up, flat tire repairs and oil for your chain.
- Purchase Price – Although you can spend upwards of $5,000 on top-of-the-line bicycles with hydraulics and a gazillion gears, $500 is all you really need for a decent commuter bike. Toss in an extra $50 for fenders for the rain and you’re good to go.
- Clothing and Accessories – If you’re serious about cycling, you’ll want to invest in some decent cycling gear that’s both breathable and waterproof. While you don’t have to dress up in spandex, it’s probably a good idea to buy cycle gloves and waterproof Gortex rain gear for those less pleasant days.
You can expect to spend $200 a year on your bicycle for maintenance and repairs. You should set aside $100 for a tune up and another $80 for flat tire repairs (4 repairs at $20 each). Throw in an extra $70 a year for clothing and accessories and the grand total is $300.
Cycling Has Its Downsides
Although you can save a lot of money cycling, it isn’t for everyone.
- Location – When purchasing a house, location comes at the top of the list for many homeowners. If it takes you more than an hour to cycle to work, it might not be a realistic goal. If you can’t picture yourself cycling at 6:30AM in the morning in the dark, it might be wise to stick with your car.
- Family – For single folks and couples, cycling can work out perfectly. Children make it a lot more difficult to be car-free – it isn’t the easiest to drop your kids off at school and daycare by bicycle.
- Weather – With proper cycling gear, you can ride your bike nine months a year. As soon as snow hits the ground, it’s wise to leave the bike indoors and take the transit or your car. Not only is cycling during the winter dangerous, road salt can do a number on your bike. It’s not worth ruining a $500 bike just to cycle an extra three months.
- Storage – There’s nothing worse than having your bike stolen. Even the most expensive bike locks can be broken. By parking your bike outside you’re leaving it vulnerable to theft, vandalism and severe weather. Unless you have a safe place to park your bike, it might be best to leave it a home.
Do you ever cycle to work? Would you ever consider trading in your car for a bicycle?