Buy a 2nd vehicle? I don't think so...

[ua_guy]

My commute has recently increased and I've thought (and others have said) to buy a cheap "beater" for commuting. I started crunching the numbers using a spreadsheet I found. Does this make sense? I think the outcome of the numbers says to hang on to what I've got and NOT buy a 2nd vehicle because the annual cost of owning a 2nd vehicle is greater than paying extra for fuel in my current vehicle.

My Car Beater
Cost of fuel (gallon) $3.93 $3.93
MPG 20 35
Miles per day 80 80
Fuel cost per day $15.72 $8.98
Fuel per year (5 days/week for 48 wks/yr) $3772.80 $2155.89

Annual Fuel Savings $1616.91

Cost of second car $5500
Annual insurance for second car $700
Excise tax for second car $150
Annual maintenance for second car $400
Annual depreciated cost of asset $1000 ($5500 purchase - $2500 residual, spread over 3 years)
Total annual cost of owning second car $2250

Net annual savings -$633.09

Years to break even (Not worth it)

In other words, even with a relatively inexpensive used vehicle that gets 35mpg, even considering its resale after 3 years, It's still more expensive to own and maintain a 2nd vehicle when compared to the fuel savings gained by owning a second vehicle.

I don't want to sell my current car (and I probably will not). I have less than 3 years left on the loan original 36 month, 0% interest loan, it's no more than 10% of my income, and I love the vehicle, and there is value in that. I just wish I wasn't putting so many miles on it. It makes sense that the strategy going forward, if my commute stays the same, is to drive my current vehicle for as long as it will go, and then buy inexpensive commuter vehicles thereafter.

Any other advice, things I haven't thought about?

[LivingAlmostLarge]

Why not a $1k beater, cheaper insurance cause not full coverage but just liability which will it really be $700/year? then maintenance minimal just tires and oil changes and if anything happens junk it.

[JoeP]

In my area, there are lots of Honda Civics under $3k. I suspect the same is true for most other areas. These cars are very reliable, don't let the mileage scare you off. Plus, it is good to have a spare car, especially if the up front and annual costs are low.

[greenskeeper]

$5500 beater? Seems like a lot to spend, I would try to find a car under $2000 if it's a beater. Even then you are really trying to save the wear and tear on your current financed ride since the difference in mpgs is ok but not great.

If I was in your position I would just drive my current car. Highway miles are easiest miles on a car and it should last you at least 250k miles if you maintain it correctly.

[bjl584]

When I think beater, I think of a car that's $1000.

If you don't want to go that route for reliability, then your numbers make sense and you shouldn't get a 2nd car.

If you are willing to spend less than $5500, then you will have to recalculate and see if it makes sense to buy something.

I can tell you from personal experience that owning more than one car can be a hassle. It's just more to keep track of for insurance and maintenance.

[ua_guy]

Yes, I should have clarified. "Beater" in my world just means a relatively cheap vehicle that will take the brunt of our driving, but still has some usable life left. $5500 would be inclusive of tax, title, licensing, so ideally we're looking at an agreed price of <$5,000 before adding those on. Lots of decent vehicles in that category.

The numbers do start to become compelling in that $1,000 vehicle territory. I could also drop comp/collision coverage and save $300-$400/year on insurance. The tradeoff with truly owning a "beater" (<$1000 vehicle) is safety and reliability.

[ruffy]

I always thought of a beater as something teens get for their first car. I certainly wouldn't want to drive back and forth with one of those. Is there more than one person working in the household? I'd go with the Honda Civic suggestion, those things can take a beating.

[ua_guy]

I always thought of a beater as something teens get for their first car. I certainly wouldn't want to drive back and forth with one of those. Is there more than one person working in the household? I'd go with the Honda Civic suggestion, those things can take a beating.

There are two of us, we both work, and we have similar commutes, but we are only able to carpool 25% of the time together right now. Both vehicles get the same gas mileage so it's a wash, whichever one we take. They're also both similar age/value.

I haven't compared numbers, but I think the biggest savings overall come from carpooling, where we combine our commutes into a single commute and spread the miles between two vehicles.

[JoeP]

Yes, I should have clarified. "Beater" in my world just means a relatively cheap vehicle that will take the brunt of our driving, but still has some usable life left. $5500 would be inclusive of tax, title, licensing, so ideally we're looking at an agreed price of <$5,000 before adding those on. Lots of decent vehicles in that category.

The numbers do start to become compelling in that $1,000 vehicle territory. I could also drop comp/collision coverage and save $300-$400/year on insurance. The tradeoff with truly owning a "beater" (<$1000 vehicle) is safety and reliability.

A Civic for around $2500 is a good car for what you describe. There are tons of used parts, they are easy to service, get great mileage, durable, safe, etc. If you're handy, there are lots of online resources for repairing them cheaply. You'll get great gas mileage, and reduce the wear on your current cars. Get a dented one: it will be less expensive and who cares what it looks like.

[debtfreeme]

Car Sharing

What prevents you from commuting more often together? It is a mindset change to commute together.

Have you looked into the sharing a car and splitting the commute with someone? The Ride share programs?

My uncle used to commute with three other people 90+ miles every day for 20+ years. He effectively drove one week a month, twelve weeks a year. Saved a LOT of money and wear and tear on his vehicle.

He is semi retired (working 4 days a week) and still commutes with them, except Wednesdays which are his day off.

[FireBal989]

You could get a beater and just get basic and cheap car insurance :-)

[LivingAlmostLarge]

For a car worth $5k why would you get full coverage? It's really not worth it. I would only have comprehensive and collision. And obviously a lot of people drive beaters for commuting so why not a $1k civic or corolla? I sold my 99 corolla for $3500 last year but seriously it could have easily run another 10 years. With the kids I just wanted safer and bigger. We didn't do a huge trade up 2006 Hyundai Sonata. So side air bags, abs, and into family sedan size instead of compact. My DH commutes in that instead of the death trap as he loved to call my corolla. I loved that car and no kids I'd still be driving it. And I drove it with one kid in the middle of the back seat.

[snafu]

When adding the pros and cons of buying a commuter car add in a hassle value for the 2nd vehicle. It feels like one vehicle or another is in the 'needs attention' line-up every other week like the wrong car is 1st in the driveway line up, insurance, license, fill-ups, routine maintenance, new tires/winter tires, parking validation etc awaits your time and attention

What percentage of your driving is ascribed to pleasure and what percentage to commute? Is this commute a new factor in your life or did you choose a car you like which doesn't meet your needs for practical for commuting?

[FrugalSensei]

My vote is that a 2nd car is not a good choice. The more "beater" it is, the greater your chances of forking out money on maintenance and repairs. And even if you get minimum insurance coverage the fact is you will paying more than what you would if you just had 1 car to insure. Same with taxes, registration fees, etc. - more than if you had just one car. I think your spreadsheet is right - you'll save on mileage but it will take years before you can actually realize a gain, assuming the beater can last long enough. Yes, your car will take the wear and tear if you don't get an alternate but I think it's better and cheaper to have one car to maintain versus 2.

There are some great beaters out there but my guess is that there are many more beater nightmare stories than there are great stories, I would guess an easy 3 to 1 ratio. I have had both and when the clunkmobile holds up well life is grand and I'm patting myself on the back for making such a great decision. But when it hasn't worked out well, I have easily dropped a grand or more at the shop and spent many a late night kicking myself for trying to play it cheap.