Get Free Gas in Retirement
Cars are the second biggest expense we face in and out of retirement, and the single worst investment you can make. They will rust, break down, cost you inordinate amounts of money to repair and eventually be worthless.
It’s time to get over our love affair with cars, especially in retirement. Not managing your car expenses in a reasonable manner will wipe out a huge percentage of your annual income.
The total annual costs for this love affair we have with our transportation are mind blowing; especially for the big-ticket cars.
But even if you kick the BMW, Mercedes or Volvo habit – Volvos were my choice for 25 years – and shift to a more affordable GM, Ford or even a small Japanese import, the purchase price can wipe out an entire year’s income from a million-dollar retirement portfolio. A whole year!
And that’s not the biggest expense.
Depreciation is the single most expensive aspect of car ownership and the one most people ignore.
Trade in your car every five years and the average yearly depreciation for a Buick is about $6,300. Hold it for 10 years and that drops to $3,400 a year, a savings of $2,900 a year!
At current gas prices, about $3.75 a gallon, that’s enough of a savings to pay for about 770 gallons of gas. Everyone, retired or otherwise, can use 770 gallons of free gas.
For most cars, that’s about 21,000 miles a year!
As we enter retirement, hopefully we have accumulated enough wisdom to know that our cars are transportation, not a reflection of who we are, or were.
If you are extraordinarily flush and can afford to throw money away on horrendously expensive luxury cars, or trade them in every few years, more power to you.
But, for the rest of us, they are a huge expense. Take the time to figure out what the real annual cost of your transportation is and make the necessary changes to save thousands a year.