Owning 2nd Car : The $8,000-a-year second car question
According to the CAA in their recently released annual driving costs survey, it would have cost $7,840 in fixed costs to maintain a Toyota Prius economy car for 18,000 kilometres. The cost for a Dodge Grand Caravan was $8,429.
The survey was done last year when the price of gasoline averaged $1.02 per litre. This year, prices are up significantly, with an average of about $1.20 per litre in the GTA this week.
At the minimum, ditching the economy car will save about $8,000 a year. But you would have to offset that with public transportation costs.
But that’s in an ideal world. The reality is that many homeowners don’t give up their cars, or if they do, they may give up one, but not both.
“You can dream about just walking to work and never having to use the car. But we ended up keeping both our cars,” said the CAA’s Jeff Walker. “If you have kids, and one is in hockey and the other has to go to ballet on the weekend, that’s the reality you have to deal with.”
Still, the transportation costs in terms of gas will be considerably less.
The CAA expects that variable costs such as gas, maintenance and tires would cost 9.2 cents per litre for the Prius, or 19.65 cents per litre for a minivan. For a round trip from Markham to downtown Toronto, that’s a savings of at least 46 kilometres round trip, or $4.23 per day in a gas sipper like a Prius, or $9 in the minivan, plus the cost of parking. (You would only save that money if you walked or biked to work. If you take public transit, subtract $2.50 each way, or $5 round trip.)
Although the price of gas is a significant expense, it’s not the biggest when it comes to car ownership.
Fixed expenses, such as insurance, financing and depreciation, are the big-ticket items. In that case, if you’re still keeping your car, but just moving downtown to save some gas, it doesn’t really make sense. But, if you’re getting rid of the car entirely, then the numbers are more compelling. And, of course, you haven’t even begun to put a price tag on the amount of time you save by living closer to work.