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We have been a single-car family for most of the time we have been married. There was just one brief moment when we owned two cars at once.

I don’t think I will ever go back.

After getting married, we started out with a single car out of necessity. We had very little disposable income after graduating from college. We decided that owning one car would allow us to make ends meet. It did just that. We were able to keep our expenses quite low until our careers advanced and our incomes increased significantly.

Jess and I alternated who would drive the lone car to work. For the first year, she worked in New York City, and it was better for her to take the train from New Jersey to work. I would take the car to my office, often dropping her off at the train on my way.

About a year later, Jess took a new job that required her to drive. Taking a bus that was an hour and a half each way through a dangerous part of town was not an option we wanted to consider. I offered up the car since my work was an easy train ride and 0.7 miles of a walk from the train each way.

This became our new normal for a few years until I also made a career change. I decided to take a job at a new employer in a different town. The office was about 10-15 miles away from our apartment.

The only problem was that the office wasn’t near public transportation. My new office was also in the opposite direction of Jess’s office, eliminating the option of carpooling. We decided to buy a second car that I would use for commuting to and from work.

After a couple of weeks of looking for a used car, we settled on a 2003 Volkswagon Jetta. We already owned a Passat, so we were already familiar with Volkswagon. It was within our budget and we were able to find it within a short window of time (in the two weeks that I gave my notice before I started my new job).

The new job came with a nice raise so it more than covered the additional expense from the second car. The career change would turn out to be one of the best decisions I have ever made. I can’t say the same for the second car.

The decision to buy THAT car is one of my biggest regrets to this day. To make a long story short, the second car that we purchased ended up having a lot of issues. We paid thousands of dollars in repairs just to keep the car on the road.

Jess and I didn’t tell friends and family about the repairs and the countless trips to the mechanic because we were ashamed of our decision. It could have been avoided. We didn’t take the car to the mechanic before we purchased it. There are a lot of regrets and things we will never do again.

It wasn’t just the many repairs that gave me regret though. The commute to work was about 45-60 minutes in New Jersey traffic. Doing that 5 days a week for a year was soul-sucking, and I don’t know how much longer I could have done it.

This year was a defining moment for us. It scared us away from owning a second car, both because of the commute and the high maintenance expenses. About a year after I started working at the new job, we decided to move to Boston. My organization had an office there, so I could transfer locations. Public transportation in Boston gave us confidence that we could survive on one car again, so we sold the Jetta.

It’s now been about six years since we went back down to one car. It’s been wonderful. Not only am I much happier, but we also have saved a lot of money on our transportation costs.

The Potential for Saving Money on Transportation

Transportation is one of the three largest expenses for typical households. This means that there is a lot of potential to save money within this category.

The bigger the expense, the larger the savings. One or two lifestyle changes can result in huge savings.

We’ve already shared tactics to save money on housing as well as multiple strategies to save on food (including buying in bulk and buying ugly groceries). It’s time that we finally talk about transportation.

The “Big 3” make up 62% of an average household’s spending. Transportation makes up about 15.9% or about $9,737 each year. That’s the average family. Here’s another look at what our spending looks like for the big three expenses.

CategoryAverage American (% of Total Spending)The Fioneers (% of Total Spending)
Housing32.8%34%
Transportation15.9%5%
Food12.9%18%
Big Three Total61.6%57%

As you can see above, we spent a measly 5% on transportation each year, less than a third of the average family. We’ll talk about how we keep our transportation expenses to a minimum later in this post.

Those with a higher income and higher spending have an even greater potential for savings. According to the US Bureau of Labor Statistics, households in the top income quintile (20%; which is $109,000+) spent an average of $18,190 in 2017.

Households in the top income quintile ($109,000+), spent an average of $18,190 on transportation in 2017.

I’ve detailed the transportation spending by income quintiles below:

Transportation Spending by Income Group

AverageBottom 20% IncomeSecond 20% IncomeThird 20% IncomeFourth 20% IncomeTop 20% Income
$9,576$3,497$6,572$8,532$11,099$18,190

The difference in spending between the bottom and top quintiles helps show the low floor for transportation expenses. 20% of American households spend an average of $3,497 on transportation expenses. This is approximately one-fifth of the top 20% income counterparts.

This tells me that the majority of transportation spending is discretionary. If 20% of Americans can spend less than $4,000, there’s a low floor on transportation spending available for all households. It’s just a matter of making intentional decisions to optimize your life.

The Best Way to Save Money on Transportation

Not only is the majority of transportation spending discretionary, but it is also tied to one type of expense. According to the Bureau of Transportation Statistics, 87.8% of an average household’s transportation expenses are related to personal vehicles.

87.8% of an average household’s transportation expenses are related to personal vehicles

This means that an average family spends $8,549 per year and the top income quintile households spend an average $15,970 on personal vehicles. If you can reduce the number of vehicles, you can reduce your spending and increase your savings rate.

The cost of owning a car is significant. The best strategy for reducing transportation expenses is to decrease the number of cars that you own.

Jess and I have been employing this strategy for many years. We are a one-car family. We COULD become a zero-car family. Yet, we’ve chosen to keep one car so that we can travel locally and enjoy activities that require a car.

How to Reduce Your Reliance on Personal Vehicles

Reducing the number of cars you own/lease is very achievable when done in tandem with another lifestyle change. For example, Jess and I chose to live in the city of Boston, near public transportation.

“Living in the city is way too expensive.”

I hear this excuse way too often. Yes, housing is more expensive than living in the suburbs, but it comes with less reliance on owning a vehicle. Because we have more than enough space in our 1,000 square foot condo, our mortgage payment is comparable to those who live in the suburbs with larger homes. The big difference in household spending then comes down to saving money on transportation.

Our location allows us to get by on one car (or even without a car if we wanted), something that our suburban counterparts aren’t able to even fathom.

Alternatively, you can look for a new job that is closer to your home, reducing your commute and reliance on personal vehicles. We’ve done this ourselves. Two years ago Jess was driving 45 minutes to work each way. Now that she has switched jobs, she’s able to take public transportation to work.

Any way you look at it, there are ways to reduce your reliance on personal vehicles. Reducing the number of cars is the most effective way to cut your transportation expenses.

But I understand that these are no small changes. If moving or switching jobs is too much to commit to right now, you can also look at reducing the cost of owning a car.

The Cost of Owning a Car and Mental Shifts to Reduce Transportation Expenses

Below are the different types of expenses associated with owning a car.

  • Initial Purchase / Car Payments
  • Insurance
  • Fuel
  • Maintenance
  • Repairs
  • Registration, fees, taxes
  • Depreciation

Instead of providing an exhaustive list of tips to reduce transportation expenses, my focus is on strategies with the biggest potential for savings. After all, this series of posts is all about big wins. Both of which are secondary to reducing the reliance on personal vehicles.

1. Buy Used Cars

This is a motto that we live by, but it’s all about a balancing act for us. Because we only have one car, we aren’t the people who will drive a car until it falls apart. I was recently talking to my brother who passed 230,000 miles on his Volvo. I’m not THAT dedicated to saving money.

When we first got married, we bought a car that was 5 years old with low miles. We kept that car for 9 years until it was 14-15 years old.

We upgraded to our current car, buying a car that was 2-3 years old this time. I would have loved to find a car that was 4-5 years old. The problem is that there are very few Outbacks that meet that criteria on the market. Most Outback owners keep their cars until they have 100,000+ miles on them.

Once you get past the irrational fears that buying used is dirty or more likely to break down, buying a used car is a great way to save money. Not only does it lower the purchase price or car loan, but it also reduces the depreciation. Depreciation is a loss on paper, but there is a cost to it. It won’t show up on your spending reports (and to be fair, isn’t reflected in our 5% spent on transportation above), but it still impacts your net worth.

Depreciation isn’t a linear expense either. Most of the depreciation is front-loaded, so if you buy a used car, you buy the car at the depreciated value and avoid taking the hit on depreciation.

This is another reason why we live in the city and only have one car. I’d rather spend more money on an appreciating asset (our home) than live in the suburbs and have more money in depreciating assets (cars).

2. Think of Cars as a Utility, instead of a Luxury

Luxurious car parked in entrance gate of house

When I was growing up, I obsessed over cars. I got this from my dad. He worked in a body shop for many years before working for a car insurance company for most of his career. My dad and I had many conversations about cars, and the intensity picked up as I was approaching 16 years old.

We started talking about my first car. Since I’m the youngest of three boys, I knew that my parents would buy me my first car. I knew it would be a well-used car, but I didn’t know what type of car it would be. My dad’s favorite response was “It will get you from point A to point B.”

I always hated when my dad would say that. I wanted a nice car. I didn’t want just any ol’ car.

But now I see the wisdom in my dad’s statement. If you think of cars as an item to get you from place to place, instead of a luxury, you can save a lot of money. Our car does have some of the luxury options like leather interior, heated seats, and even a sunroof, but these came with a cost. None of these options were the driving reason we bought our car.

We wanted something with all-wheel drive and enough space to fit all our gear when we go camping. I used to have a tiny sports car in college. It was so impractical that I swore I’d never own another car like it. We chose a wagon (or a small SUV).

When you think of cars as a utility item, this affords you savings in many aspects. Not only with the purchase price and corresponding depreciation but also in insurance and maintenance.

With this mentality, you will approach insurance differently. You may not need low deductibles or even comprehensive insurance on it once your car gets to a certain age. This allows you to reduce your insurance premiums. Maintenance expenses will also decrease since you won’t pay to detail a car (ever). You will only wash the car to prevent rust or deterioration of the paint.

Approaching your car as a utility vehicle will also help you avoid completely pointless purchases. This includes new rims or offroading tires (when you don’t have any plans to go offroading). I shifted my approach to cars so long ago that it’s hard to believe that people still pay for these items. Why would anyone pay thousands of dollars for a different metal between the rubber tires?

While you may get a temporary high when you buy a new luxury car or these unnecessary addons, this excitement will soon fade. The high depreciation and/or car payments won’t.

How to Change Your Mindset and Reduce Your Transportation Costs

Reducing your transportation costs can be a huge win, but I again recognize that these are not easy mental shifts. I’ve focused on the three biggest levers to reduce transportation costs because these will have the greatest impact on your spending.

But that doesn’t mean it will be easy. Not everyone will have the same bad experience with a second car to scare them away from owning two cars. With this perspective, I now consider ourselves quite fortunate, because we now have a life that is healthier and less reliant on cars.

While knowledge about transportation costs is helpful, the challenge comes from finding a way to motivate you. Jess has written about before: to change behavior it requires both the rational and emotional mind.

The best way that we’ve found to become and stay motivated is to create a vision for what you want. Our experience in overspending  (especially on our food budget) has taught us that overspending is often used as an escape. If you can get to the point where you don’t need to escape or have created a vision for a better life, it makes these big lifestyle changes easier.

What’s one way that you have reduced your transportation costs?

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