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In this video, I talk about why I drive a 22-year old car! Find out 5 reasons why, what kind of car it is and stay until the end to find out the average cost of the car since it was purchased (yes 22 years of data in one Excel file)!
Hi, I’m Jessica and I love talking about financial freedom after experiencing burnout early in my pharmacist career. We talk passive income and simplifying on this channel to combat stress and burnout. If you haven’t seen my burnout story or our debt-free journey while in residency/fellowship, please click those video links below.
Transportation is part of our BIG 3 expenses in the Survival/Optional Category of our Kakeibo Method. It has played a BIG role in how I went debt-free and kept expenses low for items that didn’t add additional JOY to my life and were functional to get around. You can check out more videos on debt-free living here.
Number 1 to drive a used car: NO CAR PAYMENT
NO CAR PAYMENT. Now, before you click off, I understand I’m privileged to say this because I also didn’t purchase the car in cash. I was gifted the car from my dad who purchased it in November 1999, let me start borrowing it full-time in 2008 and eventually gifted it to me to use full-time in 2010.
Number 2 to drive a used car: Car Registration and Insurance Costs
Car Insurance Premium and Car Registration Costs Lowered. The car was originally purchased and driven in Wisconsin where car insurance premiums are much lower than in Los Angeles, California. Because the car is older and has sustained some scratches from minor accidents or car door bangs, it no longer carries full comprehensive car insurance coverage. Removing collision insurance saves on the premium.
Yearly Car Insurance Premium is $500. In comparison, a 2013 Camry insurance premium is $900 per year and a brand-new $50,000 car insurance premium is $2,000 based on quotes online.
Yearly Car Registration Fee is $130. In comparison, a brand-new $50,000 car has a registration fee of $700 to $1200 in California.
Number 3 to drive a used car: Be realistic how you use transportation
Be realistic about how you use transportation. Living in Los Angeles, public transportation is notoriously horrible in comparison to other high-cost of living major cities such as San Francisco, New York City, Boston, Washington DC to name a few. One way to be realistic with transportation is to reduce how much a car is used or own one nice car or one primary car within a family setting. We’ve done this by owning a nicer electric car as our primary vehicle, working from home more often recently and now living in a more walkable area of Los Angeles. I can walk to a grocery store, bank and local shops. In the past, I lived very close to Union Station in Los Angeles and could use some public transportation that way – utilizing USC’s bus or the subway/metrolink to get around.
Number 4 to drive a used car: Invest in Quality Cars
Invest in a quality car and take care of it yearly. Purchase a quality car that is reliable, easy to maintain or repair and has a track record for going many miles over time. Now, this was not completely my decision since my dad was the original owner. Overall, it’s a Camry XLE v6 vehicle with leather seats, adjustable seats, automatic windows/air conditioning controls. It has less than 170,000 miles on it currently. We maintain it every year. You can see on the file that I have a record of all major maintenance items, when they were last performed and the next time they are due. This includes water pump, timing belt, shocks, brakes, tires, batteries, coolant flush, transmission flush, air filters, tune ups, hoses and even windshield wipers. This year I replaced all 4 tires, brakes and battery (despite driving less than 3,000 miles over the year) because safety is key. If I would buy something today that is a quality car, I would go with a full electric car or plug-in electric car for eco-friendly living.
Number 5 to drive a used car: Park the car anywhere
Can park it anywhere. Now, you may be surprised by this factor but living in Los Angeles, parking is crazy – small spaces, road parking and lots of scratches, side-swapped cars or missing side mirrors can be seen all the time. When my work decides to triple park in cars due to a small parking lot, I don’t care if my car gets accidentally banged up. Honestly, if someone decides to rear end me, I’d be much less upset in my car versus a brand-new car.
I also feel comfortable and confident driving in it because I’ve had years of experience handling it.
Cost of a 22-Year Old Car over it’s Lifetime
Excel file.
Total Cost = $33,473
Yearly Cost = $1,521 per year over 22 years
Cost per Mile = $0.18 per mile
Are you using any of these passive income ideas in your own life? Comment below please!
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// CHECK OUT THESE VIDEOS //
How I’ll Retire Early // Financial Independence Retire Early as a Pharmacist:
How we Paid off $380,000+ in MEDICAL and PHARMACY student loan debt AS FAST AS POSSIBLE using the KAKEIBO Method:
Passive Income Ideas Video: https://youtu.be/PE9-TiFOm80
7+ Income Streams: https://youtu.be/9ruhNsBy9Kc
Money Traps to Avoid in your 20s: https://youtu.be/SD0OsCWbxzM