A Closer Look at Transportation Costs
by The Stoic Investor
Just like the average family’s transportation cost is not some fixed punishment that the cruel world imposes on them.. it’s a measure of the amount of driving that they have designed into their lives, multiplied by the level of inefficiency of the vehicles they have chosen for themselves.
In my last post I laid out my plans for reducing my expenses in 2013. A few of you left some really great comments and suggestions for reducing expenses for which I am most grateful. I’ve had some time to think more about the largest expense of those three, transportation. Today I’m going to dig a little deeper into what my transportation costs will be for the year if things stay the way they are and what the potential saving could be if I eliminate one of the modes of transportation.
In the comment section of my last post I linked to a post by Mr Money Mustache that discussed the practicality of holding on to a vehicle that is absurdly inefficient in its fuel consumption. Leigh added to the discussion with her experience in owning a subcompact vehicle:
I drive a recent year subcompact car that gets between 28 mpg for mostly city driving and up to 40 mpg for mostly highway driving. I walk the two miles each way to work (or take the bus if I’m feeling lazy). I grocery shop on the way back from driving somewhere else usually or if not, it’s only a mile driving total round trip. I’ve averaged about 400 miles per month since buying the car. I highly recommend subcompacts. They are much roomier than you think!
Wow! 40 mpg?! That is crazy! Or is it? I would say a lot of people spend time thinking about what the best and most efficient way of getting from point A to point B is; in the past I have not been one of those people. Let me share with you the beast from the east that sucks up a lot of my discretionary income on a monthly basis.
2003 F-150 4×4 with a Triton V8
This was purchased back in 2005 at a very different time in my life. I’m not sure why I held onto it while I was overseas, but I believe it is now time to say goodby. It is the last remaining symbol of my former irresponsible self who was a poor manager of his personal finances. How things have changed…
This baby will drink the fuel; 16 mpg the last time I checked. Excuse me while I vomit! The sad thing is I use to commute much farther than I currently do in this thing. On a side note my ex-wife drove an SUV with a similar commute. No wonder we had money problems…
Now that I’m settling back into my new life I know there is no place for two forms of transportation and the associated expenses. Before I get into why I want to cut one or the other let me outline the expenses I have projected for the year if I hold both the truck and motorcycle.
What It Costs To Keep An Old Tuck
In my last post I showed a pie chart of the various expenses that make up the whole of my of my transportation expenses. Today I’m going to show the individual totals for each one of those expenses. Keep in mind that these are estimates for the year, actual totals may vary:
- Insurance: 900
- Fuel: 2400.00
- Maintenance: 250
- Taxes: 130.00
What It Cost To Keep The Motorcycle
The following are expenses for keeping my motorcycle, again these are estimates for the year:
- Insurance: 800
- Fuel: 1000.00
- Maintenance: 250.00
- Storage: 1090.00
- Taxes: 500.00
Together these expenses total 7320.00; remember they could be higher or lower than what I have forecasted because I don’t have data from last year to compare to. By eliminating one of these modes of transportation I could cut these expenses in half. The question then becomes which one should I cut? I’m going to be totally honest with you and admit this is not going to be a purely rational decision. I like riding the bike and have come to realize the truck is just not economical; I’m leaning more towards selling the truck. By selling the truck I would be eliminating about half of the transportation expenses for the year. The storage fees will be cut and I’m hoping to get the insurance/taxes down as well. When all is said and done I should be able to drop projected transportation expenses for the 2013 by 5034.00! Close to a 70% reduction in transportation costs!
I think going into spring will be a good time to experiment with full-time biking. It gives me time to adjust to the differences and adapt to the mode of transportation while the weather is warm. I think by taking the time to critically evaluate these expenses and what is worthy of spending my time on and what is not will pay off in later years. The first quarter of 2013 is starting off strong. I have the plan, now it’s time to implement!!