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Paid For Car is Free and Clear, Right?

I realize most folks already know this one. However, I have had a few odd questions about it, so let’s get back to the basics of owning a car. Is a paid for car now running for free?

Your car payment (be it a loan payment or {cough} lease payment) is nowhere near the only cost when owning a car, but it is the most obvious and the easiest to see in terms of your finances.  While your $400 a month payment seems like a lot of money, remember what else you are paying for:

Someone thought driving with no tires was a good idea the previous night, not such a good idea the next morning.
Tires are a big cost, but you can’t go anywhere without them.
  • Gas, another simple one to remember: you are most likely forking out between $50 and $150 a month depending on whether you drive a Hybrid or an SUV
  • Insurance on your car is at least $100 a month, depending on your age and driving habits.
  • Wear and Tear on your car is a tricky one to figure out. How much are you paying in maintenance to keep the car on the road? What does that entail?
    • Tires really only last for four years. At $500 for a set of 4, you are paying about $10 a month for tires. Add more money if you need to buy Snow Tires, too (maybe double it)
    • Brakes last 2-ish years
    • Oil Changes every 4-6 months
    • Etc., etc., etc.,

If your place of work has a travel allowance for when you use your car for work, how much do they pay you? That is very close to what you are paying per kilometre for your car, which is sphincter tightening when you figure that one out.

Agreed, this seems ludicrously simple, however, why do people not think of this stuff?

Canajun Finances Home » Paid For Car is Free and Clear, Right?

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  1. Apparently bus passes are deductible, but buying packs of tickets is not. I use my school bus pass to get to school, to go downtown and for random trips. I use the car for larger grocery pickups, and for occasional trips to pay bills where it is very inconvenient to bus it. I usually pay for one tank of gas a month unless I decide to go somewhere for a trip. My KM per year is quite low, and so my car is much lower than the average KMs for it’s age. When I bought it, it was above average and so now it is back to the average, perhaps even on the low side.

    Either way, a car is expensive, and parking in most cities is a PITA! The city LOVES it’s ticket patrols, and there are malls with limited time parking. Most people go under the two hours at this one mall, but I was never under 2.5 hours. I had 3 medical appointments there every two weeks, then my bank was there, and then the grocery store. Trying to get in under two hours simply was not possible. I complained about the tickets and explained what was going on, and they would tear up the ticket as I had valid reason for being there longer than the 2 hours. But sure enough the next time I was there, I would get another ticket. Another call, another torn up ticket.
    I won’t park downtown as it costs me more to park than it does to take the bus, let alone the other associated costs for the car…

    I sometimes wonder whether car ownership is more like being a slave to the car rather than an ownership…

  2. Most people way underestimate the cost of their cars. A while back I worked out that my car costs me $4500/year just to have available to me plus 34 cents/km to run it. That means that the 300 km I drove last weekend cost me about $100. So much for a low-cost hike in the woods.

  3. Parking is another huge cost for many drivers.

    But transit is expensive too. A monthly pass costs
    OC Transpo 98.75
    TTC 128.50
    MiWay 120
    Hamilton 87
    and that assumes the bus even goes near where you have to be.

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