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Car poverty

Posted by on Mar. 2, 2011 at 11:46 AM
  • 43 Replies

A substantial number of Americans will soon be forced to live in poverty conditions because they live in sprawl, and this number will expand as fuel costs continue to rise even more. Here’s why:

Direct Costs

   The average cost of owning and maintaining a car (payments or lease, insurance, taxes, repairs, washing, oil, gas, parking, etc.) varies between $7,000 and $10,000 per year, depending on where you live. My auto insurance quadrupled, for example, when I moved to Miami where there are more wrecks. Fortunately, we were able to get rid of our second car because South Beach is so walkable, so that helped a lot. But in most places, that’s not possible   If you live in sprawl, you are not economically viable without a car because you must drive everywhere. And your kids aren’t socially viable without one, either, so as soon as they turn 16, expect them to be clamoring for their first car. This means that a family of four with everyone 16 or above most likely has 4 cars.

Cars vs. Houses

   If you’re frugal and stay near the bottom of the range of total car costs, then that’s still 4 x $7,000 = $28,000 per year for your cars! Today, if you’re able to get a mortgage on a house, converting that $28,000 per year to home mortgage payments would buy you a house worth at least $350,000. So a family of four which owns a $150,000 house in sprawl (it’s hard to find one less expensive than that in the sprawl of most markets) could afford a $500,000 house in a highly walkable place where they need no car, all other things being equal.

From Car-Free to Homeless

   Going the other direction, a family of four which owns a $350,000 house in a highly walkable place where they need no cars would suddenly find themselves homeless if they moved into sprawl where everyone needs a car! But at least they could live in those cars, right?
   Here’s another way of looking at it: the poverty line is just over $22,000 for a family of four in the 48 contiguous US states. That family of four living in poverty in a highly walkable place would suddenly have to make over twice as much money to maintain their poverty-ridden standard of living if they decided to move out into sprawl. What a burden sprawl really is!

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by on Mar. 2, 2011 at 11:46 AM
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Replies (1-10):
by Ruby Member on Mar. 2, 2011 at 11:49 AM

I am bummed as my van went into the shop for regular maintenance this week and they called and said it needs blah blah blah to the tune of $1,400. UGH

I need a horse and a buggy.


by Bronze Member on Mar. 2, 2011 at 11:50 AM
I spend around $5000 yr on car pmnt and insurance. I spend around $2500 on gas and I don't know what on maintenance.... Wow.
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by Member on Mar. 2, 2011 at 11:52 AM
My car is paid off. I spend about 1k on insurance. Gas is about 1500 a year. Maintence is only about 1k a year. I'm begginning to love my car!
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by on Mar. 2, 2011 at 11:52 AM
We had to park my car because of gas prices, and my Dh needs his to drive to work. I put $10 every 2 weeks in mine so I can drive it to get groceries and that's it. Thankfully our house payment is 600 a month, but with house taxes and house insurance coming up I don't know how we are going to pay them this year.
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by Christy on Mar. 2, 2011 at 11:54 AM

Eh while I see the point I think most of the numbers are for the upper class. For me (living in sprawl) my house is $50k and my car is paid for so if my work did not require so much travel my yearly expenses on it would be around $1k (rounding up) with gas and insurance and repair and upkeep. I do not quite know why they add in parking in sprawl and not everyone washes their car but having a well it really would not be a whole lot. It is actually rather easy to find a house under $150K in some areas.

by Bronze Member on Mar. 2, 2011 at 11:58 AM

I know the feeling. our biggest expense is our one car. and we spend a small fortune on gas because I have to drive hubby to and from work.everything is soooo spread out. Adn we need to buy another car so I can get a job but we have to save up for that so we are out of one income for the simple fact that I'd have no way to get there.

by Jes on Mar. 2, 2011 at 12:01 PM
So I added it all up and I pay around $2500 a year for insurance and gas and normal mainantence (oil changes, tune-ups).

I don't know where that $7,000-$10,000 came from unless they're getting MAJOR repairs done every year...
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by Jes on Mar. 2, 2011 at 12:04 PM
Oh and that $2500 includes yearly registration,tags,& inspection...

I agree Storm... Those numbers are not for the average person...
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by Ammu on Mar. 2, 2011 at 12:11 PM

Wow. That's a lot of $$$ for normal wear on a car.

We have 1 car paid off and the other one is about to be. my hubby does all the repairs that he can, he got new shocks in Dec & I got 2 new tires for my van....put us back around $700. $400+ for him & $200 for me. Then I had to get 2 new tires last week (one blew on the way to oregon, seriously in front of a tire place). that cost us $192. Oh and I had to have new brakes installed cause Midas F'ed up. That cost a little over $500.

Our car insurance for BOTH cars is $694 a year. Car Reg is about $100 for my husbands and $150 for mine. Plus the $25 for each car for safety & emissions. 

No where near the $7K-$10K range. At best we have spent $3K for both cars.

Oh and our house. We own our house and bought it for $82,500. The market value was $132,000. When we got our house taxes this year our how went down $41,000. Our house is now valued at $91,000. So the cars vs. house is not us.

by on Mar. 2, 2011 at 12:18 PM

We spend in that range for our 2 cars in a year (and one is paid off).  We're commuters and the price of gas drastically cuts into our budget.  But, for us it still makes sense to commute.  We bought our home in 2009 for $204,000.  A comparable house near work would cost $500,000 or more.

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