Buying a Third Car

I’ve been debating on buying a vehicle to drive back and forth to work for a while now, since I have such a far drive.  My truck only gets 20mpg, and I could get a cheap Honda Civic that gets 35+ mpg.  The savings in gas alone would be over $100/mo.  Plus, it’ll keep miles off my truck, which should make it last longer.  And any additional trips we take would be much cheaper in gas as well.  And if my wife decides to stay at home more with our new baby, she has the freedom to sell her car (which would eliminate a big car payment), and we’d still have a vehicle for her to drive to work.

So, I finally decided to get a third car.  I got a good deal on a Civic with 186,262 miles on it.  Now, you might think that’s a lot of miles, but with the right car and the right care, it can last another 100k.

Here’s the math: I drive 60 miles a day for work, and assumed gas prices would be around $3.59 for a while.  If they go up, I save even more money.  So I took the 60 miles per day times 5 days a week times 4.5 weeks per month, and figured that I’d save $103.85/mo on gas.  To be fair though, my insurance would go up for owning a third vehicle, and there would be added maintenance costs, since it’s an older car.  My insurance will go up approximately $20.83/mo, and I figured an oil change every 3000 miles (or roughly 1.5 months with the miles I’d put on it) at $20 per change since I’ll do it myself (which is probably a little high), and I also added an extra $15/mo for extra maintenance expenses that could come up (totaling $28.33/mo).  License plate stickers cost $99 per year ($8.25/mo).

In addition to the above, I also wanted to add in the depreciation of the car that could happen over the next few years.  I got it really cheap, and it doesn’t have much more of a chance to depreciate, but I went to kbb.com and figured out what the resale value is right now, then added 30,000 miles and picked the same model two years older to figure out how much it could depreciate if I kept it two years. It was a difference of $400, or $16.67/mo.

After figuring out the total cost of ownership, I’d still save $29.77/mo.  I overestimated some things throughout the list, so the actual savings should be a little better than that.  I also feel a lot better every time I drive too, knowing that I’m getting that much better gas mileage.  Here’s a breakdown of all the costs I did in table format:

truck civic
mpg 20 35
added insurance/mo $20.83
added maintenance/mo $28.33
added license plates/mo $8.25
depreciation costs/mo $16.67
gas cost/mo $242.33 $138.47
savings in gas $103.85
total cost/mo $242.33 $212.55
total savings/mo $29.77

Check out my six month update after buying the car to see how it actually panned out.

Update: I shifted directions after about a year and a half went by.  See this post for an update on what I did, which makes a lot more sense than buying a third vehicle.

Summer Is Here/Personal Finance Links

A week ago marked the unofficial start of Summer, and I can tell.  I’ve been spending a lot less time indoors, and working on more outdoor projects.  We’ve planted some flowers in our yard, added to our landscaping, and put in a pool.  We’ve also been spending some time cleaning up our rental property, as the previous renters moved out.

This means I haven’t had much time to work on indoor projects, like my online store and this blog.  I’ll still update throughout the summer, but it’ll just be fewer posts than what you’ve been used to.  So don’t forget about my blog.  It’ll pick back up in the Fall when it cools down again.  I’ll still try to have a post every week or two in the meantime, though.  Stay informed by clicking the Like button at the top right of this blog.  If you click that Like button, you’ll get an update on Facebook every time I have a new post.

I thought I’d add some links for you to take a look at, if you’re interested in reading more about personal finance.  Here are some I’ve read that I’d like to share:

New Year’s Goals – Progress Update – Fifth Month

It’s now June, so it’s time for a progress update on my New Year’s Goals.

  1. Sell old house.
    Our renters are now out, and we haven’t found a buyer or renter yet.  It looks like we will be paying the mortgage on our own this month, which will make it difficult to pay down any real debt this month.  Hopefully we can either sell it or rent it out sometime this month.
  2. Reduce non-house debt by 47.57%.
    Reduced by 15.97% so far, which is still behind the pace (according to the pace, we should be at 19.82%).  As I mentioned last month, we’ll probably get closer to 33% since our house most likely will not sell.
  3. Be able to jog 5 miles without walking.
    I’m still running 3 miles, but I haven’t been doing it as often as before.  Since the weather’s been nice, I’ve been spending my time doing yardwork outside.
  4. Do 100 push ups in 3 minutes.
    I’ve really slacked on the push ups and sit-ups.  I have only tried a couple times in May, and that was early on.  I will probably pick it back up when it gets colder in late fall.
  5. Do 200 sit-ups in 3 minutes.
    See the push ups.

I really enjoy running now, which I never thought I’d say.  Since the weather’s warmer, I haven’t spent as much time on the workout goals, since I’m more active outside.  I still think I can hit all the goals, with the exception of selling the house and the debt reduction.  But the push ups and sit-ups are looking harder now than a month ago.  I really need to get back on track…