How Much Is Your Car Payment REALLY?

I recently purchased my first car and the process was a bit overwhelming. I am quite shocked at how much everything costs and it made me think about what it really costs to operate the shiny status symbol sitting in my driveway? The answer might be comprised of: a car/lease payment, insurance, gas, tickets, parking, maintenance, etc. but have you ever actually sat down to budget out what the actual per month cost is for your own car? It might shock you when you think about the true, per month cost of that shiny status symbol! In reality, there are many other transportation options in Boston (bus, subway, commuter rail, walk, bike, rent, etc.) that might be a cost saver that you never thought about… For your own peace of mind, let’s tally up what your costs are on a yearly basis:

Car/lease payment: _______
Car Insurance: _______
Gas: _______
Tickets: _______
Parking: _______
Maintenance: _______
Other: _______

Take the total of the above costs and divide by 12 months to determine what your monthly rate is. If the monthly cost shocks you, check out some other options that might be a cheaper, more cost conscious way to get you from A to B, such as:

1. LinkedPass (subway and bus) for the MBTA – at about $59/month, in 30 trips, the pass has completely paid for itself. In my case, I take the bus to the T and then walk to my office building. The entire trip would cost be $1.70 + $.45 in transfer each way to work or $4.30/day times an average of 20 work days equals $86/month. That means that I would be roughly saving $27/month or $324/year just by having a LinkedPass. In addition, the MBTA also offers Commuter Rail and Commuter Boats depending on where you live and your commute to work; these might be beneficial options as well. Check out the MBTA rates on passes at MBTA and don’t forget to keep your receipts as you could be eligible for a Massachusetts Commuter Deduction on your individual income taxes!

2. Bike – depending on your location and where you intend to go, biking to get there could be a great alternative. I recently invested in a bike and absolutely love it – mind you, the winter months might be an issue in Boston due to inclement weather! Biking is quicker than walking and gives you more flexibility than the T or bus. An average bike can run you a few hundred dollars for the bike and the necessary gear (helmet, lock, etc.), but can save you money in the long run and think about the exercise! – I like to use my bike to meet friends for dinner, it saves me about $20 in cab fare. If you did that a few nights a month, you would have the price of the bike paid off in a short period of time! Check out local bike shops like Landry’s Bicycles and/or Back Bay Bicycles for gear.

3. Zipcar – give up owning a car all together and start “sharing” a car when you actually need it! You might have seen Zipcars invading Boston and the concept is fantastic. Only rent the car for however long you need it. Pick it up and drop it off in the same spot for a very reasonable hourly rate based on the type of car that you desire for your needs. Sign-up fee is minimal and so is the annual fee, I’d equate it to one ticket for forgetting that you parked your car in a street cleaning spot overnight! I actually signed up for Zipcar this past summer to merely move myself from one side of the city to another. My car was not big enough to cart all my possessions across town and it was easy to rent a pickup truck for a few short hours with Zipcar! Plus, you don’t have to worry about mileage or gas as it is all built in to the hourly rate. Think about all the fantastic trips you could take to IKEA to pick up furniture, a big trip to Target to stock up on some essentials or just to get yourself out of the city for the day! The possibilities are endless and so are the spots that you can pick up a Zipcar in Boston – check current rates here.

So, are you up for the challenge? Do you think owning a car in the city is worth the money? Tell me what you think by leaving a comment.

One Response to “How Much Is Your Car Payment REALLY?”

  1. Great facts – I sold my car 3 years ago and my monthly transportation costs went from $500/month (car payment, gas, insurance) to $59 for the LinkPass on the T plus whatever Zipcar expenses I have. I suddenly felt VERY rich! I use $7/hr hybrid Zipcars about every 2 months so for me, that is the best deal in town.

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