Little Mazda 3, it’s time for us to have a sit-down.
I love you. I really do. But I have to ask myself, is this really working?
I bought my car on July 27, 2010. I bought it because I had recently attained my license in real estate, and there’s no way that you can be a realtor without owning a vehicle. My heart was bursting with pride.
But the second I bought it, I became stressed, sometimes so badly that it affected my health. I sometimes didn’t eat or sleep out of sheer financial worry. At the time, I was employed as a real estate assistant, making $30,000 per year. That worked out to a cashflow of approximately $1850/month. My car loan was $275/month. My insurance was $220/month. Gas was $120/month (since I’d go home once a month, working out to be about $40/trip). Tally it all up, and I was paying a whopping $615/month, not including parking, maintenance, etc. No matter how I budgeted, there was no way that I could go a single month without dipping into my emergency fund.
My monthly pay at my new job is closer to $2,675, which fluctuates monthly depending on bonus. I don’t have car loan payments anymore since I paid the vehicle off in full at the end of September.
Surely my life will be so much simpler now, I thought (naively). I have enough cashflow to pay for my car, in my head a mere $400 (ish) a month.
Silly, silly me.
Since paying off my car in full in September, I have been living paycheque to paycheque. I have been desperate to replenish my emergency fund, which is currently sitting at a very unhealthy $300. At first I didn’t understand. Now without car payments, I should have been able to apply what I was paying biweekly ($137.36/biweekly) to my savings, and still be comfortable! What happened?
Life happened. In addition to the unavoidable expenses outlined in my previous posts, I had a very minor accident. Last Wednesday in a parking lot, as I backed out ever so slowly and cautiously (I am an uber-safe driver), I somehow managed to swipe someone’s bumper who was pulling into a spot right behind me. The parking lot was exceptionally small and there was maybe $100 worth of damage done to my car, which I can fix with a touch-up pen. Hers … well, she got scratched, but not dented at all. I estimated the paint job on her car to be $300-400, right on the corner of her bumper. My boss’s auto shop offered to do the work for $385. Because she needs her vehicle for work, I was prepared to pay for her rental car for the day as well. I was stressed and miserable, because I was afraid it would cost $550, which is money that I simply don’t have right now. So, after two days of research and quotes, I offered her $550 in cash to take care of the whole thing, so that I could have it over with before my birthday on Saturday (what a great birthday present to myself).
Uh oh. This lady then sends me a separate estimate for $700, which the shop left “open-ended” because she thought there may be some damage under her bumper from the force of the accident (bearing in mind that my speed was probably 5k/hour). Not only that, but she informed me that it would take 3 days to fix, meaning I’d be paying for her rental car for 3 days. Two words: Yeah. Right.
I initially didn’t want to involve insurance because the last thing I wanted was a strike on my record. HOWEVER, after calling my insurance company and receiving their advice, I discovered that because I’m not claiming any damage on MY vehicle, the deductible does not apply. So I don’t have to pay a dime for her repairs. It will go on my record instead for 6 years, but the circumstances will be taken into effect. Namely that I didn’t hit a bus full of innocent schoolchildren. My crime is substantially less.
That being said, when my insurance renews in July 2012, I could be looking at a 10-15% increase of premiums. That would work out to be $20-30 extra per month at my current rate, which after four years will wind up being as much as I’d owe her if we didn’t involve insurance, but at least this way I’ll know that she isn’t extorting me for more than what she deserves.
The event acted as a catalyst for the vehicular frustration I’ve been feeling for the past 16 months. Which eventually left me wondering: why do I own a vehicle in Toronto?
Now that I’m working purely in administration, I still use my car for work, but rarely. Sometimes, it’ll be once or twice a week, and sometimes it will be for some time sensitive documents. Since joining my current team in June, I’ve logged about 300k of work-related mileage on my car.
Aside from that, I really don’t like using my car in Toronto. Traffic is horrible; it can take me 45 minutes to drive 10k within the city to visit a friend. Then, I have to figure out parking. No parking between 8am-6pm, no parking between 12am-7am without valid permit, no parking on this side of the street Nov 30-April 14 (snow route), 2hr parking limit from 7pm-12am, etc. Even after I have been so careful to park in an appropriate spot, I have sometimes come back to find a little yellow flag fluttering beneath my wiper, kindly informing me that I owe the City of Toronto $30 for improper parking.
From March to October, I prefer cycling, and always try to leave the car home, even to get groceries. Driving sucks.
But, the car has been super convenient for visiting my family. My parents live in a remote rural area, about 2.5 hours away from the city. Owning a car gives me the freedom to visit them whenever I want. Or if I want to go to Montreal with my bf, we can just go, no planning required. Visiting other relatives is also a breeze. I really appreciate my car for out-of-city activities and travel.
And that is why God invented rental cars for weekends, and Zipcars for in-city.
So what is my car really costing me per year?
$2640/year (insurance, and that’s WITH a clean record) + $1800/year (gas) + $600/year (maintenance, cosmetic repairs, Green P parking, misc.) + $576/year (parking at my apartment)
= $5,616/year (anticipated). Or, approximately 18% of my net income.
Versus Public Transportation, Cycling and Car Rentals
$726/year (metropass for 4 months during the winter, plus TTC tokens for rainy days) + $1200/year (renting a car every 5 or 6 weeks to go home, $30/day + taxes + gas) + $500/year (misc travel, go trains, group trips, etc.)
= $2426/year (anticipated). Or, approximately 7.9% of my net income.
The amount of money that I’m throwing at my insurance with a clean record is sickening. The sad thing is that it’s the cheapest rate I could find in Toronto, what with being under 25 and all. But my BF made me feel a lot better … he informed me of all the accidents he’s had, and how his insurance still remained reasonable since he was in Montreal at the time.
I’ll be leaving Toronto in 2-3 years. Hopefully, I’m going to travel around the world before I bike across Canada. Then I’ll be settling in a different city, and I’ll begin to put down roots. At that point, I’d probably like a car, since my cost of living will be lower, and anywhere is better than the GTA as far as commuting infrastructure is concerned.
So my current thought is that, come spring, I will probably try to sell my vehicle. Maybe I’ll pull a Krystal Yee and get a little scooter, so that I can still run errands for my boss from March-November, it’s going to depend on how the conversation goes. For now, I’ll at least enjoy my car throughout the bitter cold of December, January and February of 2011-2012.
I do love my car. I fought for it tooth and nail, and paid the entire thing off in 14 months. It gives me independence, mobility, comfort and convenience. But the stress of owning a car in Toronto also gives me a migraine. And with an additional cost of $3,190/year, or $265/month as opposed to cycling and public transit, I don’t know if it’s worth it. If I bank the difference of $265 a month, plus put the $8500 that I think I could net from the sale of the car, after 2-3 years I think that I could have a great down payment, or I could buy another used car with all cash. Plus, I wouldn’t have to worry about storing the vehicle while I took off for 8 months to travel and cycle the globe.
Either way, it’s been a huge learning experience for me, and I’m very proud about paying off a car in full, without any assistance. Car drama seems to be a staple of most 20-sometimes, and I am no exception.
If cycling in Toronto is good enough for Rachel McAdams, it's good enough for me.