By: Revanche

Questioning my assumptions: do I need a car?

March 17, 2010

I was catching up on my Consumerism Commentary when something Flexo said held my attention: “I believe there are several stages to becoming financially secure or independent. There may be a time where it makes sense to save every cent possible…… I had to survive without a car (relying on friends and public transportation), eliminate cable television, and share an apartment with three roommates. Now that I’m earning more than what I need for basic expenses and long-term saving and investing, I don’t have to be as tight. I willingly give up some income in order to buy myself more convenience.”

Earlier this evening, while discussing the car hunt and the various finds under inspection, a friend asked me, “Do you really need a car? Public transportation won’t cut it?”

My initial answer was a glib “no, public transportation doesn’t quite cut it.”  Reading Flexo’s comment above pulled me up short, though. Is that true? Do I really need a car to supplement public transportation or am I taking the easy way out and spending more money I can’t actually afford for convenience?  *note: Flexo can afford to expand his spending horizons. I don’t mean to imply that he’s taking the easy way out.*

Since the search began, the budget grew to more than I’d wanted to spend because my requirements haven’t been met. If I’m spending enough to dip into the emergency fund, job or no, the decision has to be sound so I returned to the drawing board to rehash my reasons and evaluate their premises.

1.  Because of the Big Lie and the need to transport my personal effects, I needed a long-term car. A one-way rental is too expensive, a round-trip rental is a waste of time and I’d need to fly back.
— Since relocation was successfully negotiated, I should be able to afford to ship personal effects and fly.
 Evaluation: Don’t need a car. 

2.  Driving would be easier due to potentially abnormal working hours.
—  I haven’t experienced rush hour in the metro areas yet so I can’t speak to that, but parking costs between free (minimal street parking) to $20/day depending on the various lots.  On average, $7/day, $140/month.
Meanwhile, commuting options exist, though inconvenient.  The morning commute would require some combination of two buses and 1 rail system with a minimal amount of walking on both ends ($6.50 – 9.30/day) and travel time of 30 minutes.  If the location changes as promised, the new commute requires some combination of two buses and 2-3 rail systems with a minimal amount of walking on both ends ($7-9.30/day) and a travel time of 1.5 hours.
Evaluation:  The cost could actually be equal, given the trade-off between commute time/transfers and the wear and tear on the vehicle. 

3.  I’m choosing to find housing in more suburban areas for more affordability which also lends itself to free parking/no zoned parking.
—  If I chose to live in the more urban area, I’d likely be in walking or biking distance of most nearby businesses such as restaurants or groceries, entertainment and shopping.  But not #4.
Evaluation: I need more data.

4.  My preferences for entertainment are far-flung and while potentially cheap or free, require that I be able to reach them somehow.
—  I could always hole up in the room with a stack of books and become a hermit.  I’m kind of kidding. The reality is that my preference for entertainment is rarely to go out. I prefer to spend quality time with friends or animals. While that can be low-key, it can only happen if you’re mobile.
Evaluation: At first I thought: I spent several years being a hermit in the name of saving money and paying down debt.  But my social network won’t be strong enough to rely on friends for transportation.

5.  I need to be independently mobile.
— I need to keep costs to a minimum.
Evaluation: No car.

That last part is really a tosser, though, because I have to be honest – I rated the anti #5 argument higher because I’m afraid to stop being being hardcore, down to the bone, slasher frugal.  I’ve lived that way for years. Now that I have two (or 1.5 households) to pay for my instincts scream at me to stay that way.

Meanwhile, a competing sense of self(ishness) says that I’m old enough to be on my own and do what I want, and what I want is to be independently mobile.  Is my desire to Stop Sharing so strong that I’d pay the cost of another car?

Let’s face it, a car will cost a lot of money for someone who won’t be making serious bucks.

First, there’s the fixed cost of purchase.  Let’s say I go wild and plunk down $10k.  A little more than half of that was my tax refund and money saved for two years just in case I had to pay taxes.  So a little less than that comes out of the emergency fund.

Then we tack on a conservative $1000 for insurance annually.  We also have the costs of maintenance and repairs which are typically budgeted around $1500/year.  Remember now, that’s not just for the new car, that’s also for my old car which I remain responsible for.  So the insurance and maintenance budget has doubled.  Then of course, we have fuel, and since I live in CA we have fuel + $$.  Conservatively we’ll call it $100/month, with say, $70/mo for parking assuming I cannot always get parking for free.

Can I afford an annual Convenience Fee of $4540, while replenishing a $5000 hole in the emergency fund?
Probably.

Well, unemployment already did a number on them so I honestly haven’t set any, but probably not.

I’ll be honest, I didn’t see the math playing out this way. I was pretty sure it’d come very firmly down on the side of public transportation.  Tolls (for driving) and fare increases (for commuting) were not factored in as they’re not predictable. In truth, even with the car, I’d likely be doing some pub transportation once I figured out that traffic and parking vagaries so these numbers (and the difference in cost) remain soft. With any luck that would bring the daily amount down on average by half.

At the end of the day, after running the numbers, it’s partly a math and partly an emotional decision. If I’m willing to take the initial $5k+ hit to my net worth on the math side, then my emotional side argues for the buy as well.

I am, in essence, the personification of Newton’s Law.  When “at rest,” I tend to stay “at rest.” When I’m limited to sharing a vehicle on someone else’s schedule, I have been categorically a shut-in working on my projects indoors from dusk to dawn and back again, without a break. I leave on the spur of the moment and if that’s not possible then I just don’t bother.

Historically then, my sense of stability and productivity is found in part in my ability to go about my business at will, without wondering if the car’s been taken by the shared individual, without having to cut short my errands or reschedule to accommodate someone else’s schedule.  It is, I’ll admit, kind of ridiculous.  But that’s how I function and that’s what I have to work around.  And it’s kind of more ridiculous to refuse to make a purchase that is mathematically acceptable simply because I don’t want to backslide on my monthly numbers.

Note: the calculations for the car are based purely on the commute numbers, but clearly the car will be handy for longer road trips that are tentatively planned for later in the year.  Increased usage would increase cost but it’s the function of the car to be used.

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