I love driving and always dreamed of a white convertible in which I would drive away to Italy. Not to mention the loud music, sunset, the must-have sunglasses, and the wind blowing my hair. Like in the movies, right? Well, maybe one day, but for now it would not be wise for us to invest in a car. Let’s see our top 5 reasons why we decided to remain carless.
- MONEY
Not surprisingly our #1 reason is that cars cost a lot. Insurance, MOT test, maintenance, tax, tolls, parking, cleaning, and of course the car itself when you buy it. Even if you don’t use it, cars have fix costs. In two words, it’s a bottomless pit. (In most cases at least.) Especially when you cannot afford it and take a loan for purchasing. Paying the interest to the bank for months/years when the vehicle costs less and less. If you have to ask for a loan to buy a car, that’s a clear sign that you cannot afford one. It is an expensive commodity.
- STATUS SYMBOL
Who are we buying our car for? Ourselves or to show off to our neighbors or friends? Cars have become a status symbol. It’s like having a microwave, so natural to own one. So, who are we really buying it for? Well, we are definitely not having one just to park outside and have it rot. Not owning a car does not equal being poor!
- UNDERUTILIZATION
Living in a town where everything is reachable mostly by foot, bicycle or public transport, it would be foolish to have a car just in case we would go further. Cars make you lazier. It’s true that it’s more convenient and saves some time, for instance, when you go for groceries. But, does that extra half-an-hour you save worth the huge amount of money you spend on your car? Not to mention that now we have the possibility for home delivery.
- POSSIBILITY TO RENT or CAR-POOL
Renting a car when you need it is way cheaper. We can rent from ~18€ per day, buy the gas/diesel, paying for parking and that’s it. In this case, you don’t pay for amortization, maintenance, etc. Another option can be to car-pool. As most people have cars, you can just go together. It’s a win-win for both parties. You have nice company, you can switch driving if you go long-distance and share fuel costs.
- ENVIRONMENT and SAFETY
Protecting the globe, our environment by reducing our footprint. This reason needs no further explanation I guess. Safety as in avoiding car accidents which are very common. On the road we can find a variety of drivers: one that just should avoid the wheel, one that is exhausted and cannot concentrate, one that is in a rush for a meeting, one having a call or checking messages, and the list goes on.
Just calculate how much money you have in your car, how much you pay for it on a monthly basis, and how many hours you have to work for all of this. It has to be worth it, otherwise, it’s just burning the money that you could easily invest in an asset that makes you wealthier and not poorer. I’m sure that some of you might be surprised if you calculate how much you spend on your car each month. Please, do the math.
It would be great if cars are seen just as assets and not something that reflects your personality. Checking the pros and cons and then decide if they are worth the investment. Surprisingly, or not, most people do not make car-related decisions this rationally. They fell in love and they „need” to buy it. Cars have functionality but in most cases, it’s not why they are bought.
We’re not saying to get rid of your car now. There are quite a lot of justifiable reasons for owning one. The purpose of this article is to change the view on cars as they are just an asset that serves you. To think before you act and spend a ton of money on something that you don’t actually need just want.
So, evaluate your own personal situation and make a smart choice for yourself. Your family does probably need a car, maybe even two. On the contrary, maybe you realize how much money you have in your car that you don’t really use anymore and would be better off without it. You can invest that extra money or pay back part of your loan if you have any. Maybe you’re thinking of having a new car, a better model as you’re bored of the current one. If it is still safe and runs perfectly, why are you getting a new one? Ponder your car situation and decide wisely.
It’s a bit funny how people want to save money and they are cost-cutting on clothes, food, or small stuff, but buying a house or car without thinking it through. It’s usually the second biggest asset a family owns (house/flat is the first) so it should be a careful decision. When buying a car, some suggest applying the 20/4/10 rule. This calculation helps you decide what kind of car you can afford. If you’re interested, google the rule. Personally, I don’t agree with this rule and would make it stricter but still, it helps to guide the majority of people. We would only buy for cash if we ever decided to have one.
As you can see, from a financial point of view, cars are not good investments. Its amortization is constant, there’s a risk in holding them (stealing is still an issue) and they are expensive.
So, tell us, how do you see cars? What factors did you consider when you purchased your car? Did you buy it full cash or get a loan, lease? And the most important question: Did you watch the Fast and Furious movies because of the cars or Vin Diesel?