Today I had some free time and I decided to reflect a bit more about all the costs involved once you have your own car and also compare it with Car2Go or Emov option that we have in Madrid, which is more environmentally friendly. I wanted to know daily, monthly and yearly expenditures in each case.
In order to calculate all the numbers I took into account previous experiences from my father and few other cases:
- 2nd hand car from 1986, bought in 2001, aprox. 1500€, taken to scrapping in 2005
- 2nd hand car from 1988, bought in 2004, aprox. 1500€, taken to scrapping in 2006
- 2nd hand car from 2002, bought in 2o04, aprox. 15.000€, still working
- 2nd hand car from 1988, bought in 2004, aprox, 1000€, taken to scrapping in 2016
- 1st hand car from 2015, aprox 15.000€, still working
In this case we don’t take into account inflation, which could make more expensive having your own car. For the estimation we need to take into account different expenditures:
- Car price
- Insurance. Average of 300€ per year, perhaps it could be a bit lower or even more, it depends on you accidents rate
- Yearly car taxes, paid yearly in Spain, this amount increases yearly
- 5 years warranty for the car, when you buy a new car, they force you to take the car to official place in order to change oil, filters and to check other main issues, we paid 300 € las time for the car which cost us 15.000€ and I am expecting similar amount for that next years too
- General maintenances, which is defined as extra cost that you have once you have no warranty (changing battery, something gets broken/old, engine belt, light bulbs and other parts, mechanics’ salary, some accident where you need to fix your own car…), I have estimated with 110€ for the 6th year and this amount would increase each year by 10 €
- Tires, which we are changing once in two years
- Oils/filters/refrigeration liquid, during first 5 years this cost is covered by warranty, but later you would need to pay for it close to 70€ per year
- Also we have to pay for mandatory car inspection called ITV in Spain, new cars don’t need to have it until 5th year, then you do it every two years and once the car is older than 10 years you need to do it every year
- Selling price, I would go for average market price, it is some estimation made by my previous experiences
In this case we are going have few cases:
- We buy new car for 15000€ and sell it after 10 years for 1500€
In this case we can observe that daily cost would be 5,7€, we don’t take in consideration:
- Selling price could be lower as technology is changing really quickly
- Parking places costs
- We are supposing no major damage to the car, but it looks pretty low the expenditure for general mantainance
- Insurance companies are talking about increasing prices soon as it is not sustainable to have each year lower cost on insurance…
Let’s make some numbers. If someone is using his car just to go to work, one way 25 min, both ways would be 50 min and during 5 days per week. We could estimate that for 100 km needs 6 liters for 1,2€ which makes a total of 7.2€. If you go and come back to work by car you would spend on fuel close to 2 euros per day, which would be 10 euros per week.
Finally we would have:
- 6,1 euro daily cost for the car and if we don’t use the car on Saturday and Sunday, the car still costs us some fixed money, which would be: 5,7*7=39,9€
- Fuel 2*5=10€
- Parking? Do we need to pay extra? Garage? Parking at work?
Let’s exclude the parking and we would have a total of 49,9 euros per week.
What would be if instead we would take Car2Go or Emov, electric car that you can rent in the city and you pay for time that you use it. I used it in Madrid once and for 24 min I paid 4,56€. If we would take that in consideration we would be able even to have it cheaper than to use our own car. 4,56€ one way, both ways 9,12€ and during 5 days: 9,12*5=45,6€.
Taking your own car in this case would be 7% more expensive than Emov or Car2Go.
Imagine if you would have even more expensive car…
Here are few other examples:
- We buy new car for 15.000€ and sell it after 20 years for 500€
- We buy new car for 15.000€ and sell it after 30 years for 0€
- We buy 2nd hand car with 10 years old for 1.500€ and sell it after 10 years for 500€
- We buy 2nd hand car with 20 years old for 500€ and sell it after 10 years for 0€
If you would like to have an access to the excel file to improve or change some estimations, here you can download it, let me know if you see some errors or some points of improvement: https://goo.gl/oPRb4N
In this case with my estimations, it looks like the best option is to buy 2nd had car with 10 years and sell it after 10 years, but of corse, there is a risk that it could have some hidden damaged in the car.
I hope it is useful this information in order to compare your alternatives.