Driv­ing down car costs

Central Leader - - OPINION -

When I was a cub re­porter years ago on a news­pa­per in a pro­vin­cial English town, I had the world’s worst car, a red Renault 5 which lost power when­ever it rained hard.

How I hated that car. Re­pairs, petrol, in­sur­ance, regis­tra­tion.

It was a con­stant drain on my mea­gre in­come.

Then one day, driven by its fail­ure to start on those icy Bri­tish winter morn­ings, I sold it and bought a bike.

For the next two years, I zipped ev­ery­where on that bike, park­ing it out­side the town hall when cov­er­ing coun­cil meet­ings, chain­ing it to the rail­ings of the court­house when I was on court duty.

If I had to go to one of the three neigh­bour­ing towns on my patch, I’d ride along the canal tow­paths, star­tling the odd an­gler and king­fisher.

And I fi­nally had a sur­plus at the end of each week, I was fit­ter than I had been since play­ing cen­tre for my school’s city-cup win­ning rugby team at 15 and I was hap­pier.

When I wanted a car for a week­end away, I hired one. It started a pat­tern in my life.

When I moved to Welling­ton af­ter my English re­por­ter­ing was done, I did my com­mute from Wadestown to Courte­nay Place on a bike. I had leg mus­cles like tree trunks.

Then there was an­other stint in the UK, liv­ing in Cam­bridge and whizzing to the sta­tion each day on my bike to com­mute into the city where I worked for an in­vest­ment news­pa­per.

The same pat­tern held when we moved to Auck­land a bit more than a decade ago.

Then the first baby came along and a se­cond car be­came a must.

I credit all those years of bik­ing for my health and also help­ing es­tab­lish my fi­nan­cial foun­da­tion.

Which is why I be­grudge ev­ery penny I spend on motoring and why I hope within the year to be­come a one-car house­hold again and buy my­self a new bike.

If I can get the goa­head on that from the other half of the house­hold ex­ec­u­tive, it’ll drop ex­penses by about $5000 a year.

Sta­tis­ti­cally speak­ing 15.12 per cent of house­hold ex­pen­di­ture is on trans­port.

My ad­vice to young­sters start­ing out in life is to se­ri­ously con­sider be­ing car-free for as long as you can, or share one as my col­league Richard Mead­ows (au­thor of Sun­day News’ Bud­get Buster col­umn) does with a flat­mate.

You have to have a li­cence in this world but not a car. But if you must own a car, it is es­sen­tial to keep costs down.

The fol­low­ing is a re­al­life ex­am­ple from last year of how not to buy a car with com­ments in brack­ets.

A man spent $13,750 on a 2000 Toy­ota Es­tima (he paid too much). He bor­rowed at 25 per cent (never ar­range fi­nance at a deal­er­ship). He paid $1000 for car in­sur­ance from the car dealer (a to­tal no-no). He paid $1000 for a three-year war­ranty (not worth the money).

He paid $500 for gap in­sur­ance (if you are sold this it is be­cause you have over­paid for the ve­hi­cle). He paid $2056 for loan pro­tec­tion in­sur­ance (way too much and the one-off pre­mium was added to the loan so in­ter­est of 25 per cent has to be paid on it).

In all, over four years the cost of that car, ex­clud­ing re­gos and petrol, was just shy of $30,000.

My rule of thumb: If you are spend­ing more than 15 per cent of house­hold in­come on trans­port, it’s time to have a se­ri­ous re­think.

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