The Case For a Third Car
Many personal finance and frugality websites recommend getting rid of a second car in the household-- be a one car household. Only one payment, one registration, one insurance bill, etc. I am going to go out on a limb and make a radical suggestion . . . own a third car.
Yes, own a third car/truck! Why? Here are two good reasons:
- Acts as a backup to your primary cars-- what if one of your other cars is in the shop?
- Gives you other functionality/flexibility-- Snow car, dump-run truck, towing, plowing, etc.? (See my post
Multi-Purpose, Residual Benefits, and By-Products)
Now ideally, this third car is a car/truck that is:
- Paid off-- no payment whatsoever
- Requires no collision coverage-- if it is wrecked, it gets junked because you have a high deductible and the car is a low book value auto
- Low maintenance-- not over driven, so less repairs we hope . . .
As a reminder, you don't need all late model vehicles with loan or lease payments, used or "pre-owned" vehicles are much better than they used to be. Here is my post Capture Your Dream Car
Personally, I am looking for a small pickup truck with a plow attached that will plow snow, do dump runs, haul wood and act as a backup vehicle-- it won't be hard to find these days (See my post Have You Noticed the Giant Toy Sale Going on Lately?).
Categories: Automotive, Money Savers, Frugality, Personal Philosophy
Tags: Automotive Personal Philosophy Frugal Frugality Money Savers
Having another vehicle isn't such a big drain on the wallet unless you are making payments on it or have it insured for other than liability.
I consider myself to be a frugal individual, and I have a car, two motorcylces and a pickup truck. I also have a dump truck, a ranch pickup truck, four trailers and three pieces of heavy equipment. And, everything is paid for.
I only insure the car, pickup truck and motorcycles. The rest stay on the property or are used locally at my neighbor's places. Sure, I could save about $500 a year if I did't license and insure all but my car, but I would pay way more than that if I rented the stuff when I needed it, or paid delivery charges for things I couldn't carry in the car.
It makes much more sense to own other vehicles and have the convenience of doing what you want to do when you want to do it. We need to keep things in perspective. I need and use my vehicles, and I really enjoy riding my motorcycles.
Where the real saving comes in is lowering the consumption of fuel. With the recent increase in gas prices, driving less provides much more savings than not having another car. I reduced my local fuel consumption from about 800 gallons a year to about 150 gallons, and that's more than $2,000 savings even at only $3.25 a gallon for gas. Who cares if you have another car - the savings is in using whatever vehicles you have less often.
Clair
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Clair,
I am a firm believer in having appropriate vehicles for the appropriate situations. We have a minivan to move six or more people (we have four kids between us). I am on the road to see clients every week (500+ miles per week) and I drive a vehicle that gets gas mileage in the mid thirties. Finally, I am looking for a utilitian vehicle that will move snow, wood, and garbage, as well as act as a backup. The key that you hit on in your comment is, "And, everything is paid for." That is what most people miss and why I see "toys", I mean vehicles being sold on front lawns everywhere I go.
-DDFD
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DDFD:
My car, and both motorcycles were purchased new - all paid for before I drove away from the dealerships. I don't believe in having car payments - the cost of a vehicle just doesn't warrant them, especially when you can get a used vehicle really cheap.
I've had this belief about used versus new cars all my life. Here is a story on my website from more than 25 years ago that you might find interesting and entertaining. It's all about the perceived value of a new car, and the added value and frugality of a used car.
http://www.frugal-living-freedom.com/cheap.html
As you'll see, the difference between the two is often a matter of self-esteem. My self-esteem has always been tied more to what's in my bank account (which can be used for many purposes) versus what's in my driveway (which can be used for only a few purposes). And, I would never think of having my bank account for sale on my front lawn.
Let me know what you think.
Clair
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Clair,
I have read that article-- I have had your site in my favorites for a while (I have about two dozen in my frugal/self-sufficiency folder). I read the whole sight at the time I discovered it. I truly enjoyed you posts-- we share a very similar perspective.
As for cars, cars are funny things. People lose sight of the fact that at the core, vehicles are transportation and utility. The status and self-esteem building are products of years of a marketing machine that has been around since the 1950s. The idea that cars should be replaced every two years is load of bull.
I am not saying to drive a car that looks like it is totaled, but a clean, well-maintained, paid-up vehicle can serve you for 10+ years.
DDFD
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DDFD:
Glad you are enjoying it. I have updated it in several areas over the last few weeks and just put my 75th page on line today. It's about the foolishness of buying forever stamps, thinking they will save you money over the long haul.
I'm posting here for the same reason you enjoy my site. We strike a nice chord.
Clair
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My third vehicle is a 14 year old 4WD Jeep Cherokee. It only gets used about a thousand miles a year, mostly for hauling heavy or bulky stuff. Also use it for camping occasionally. It stands ready for those deep snow days, which admittedly are few even here in Minnesota. And it’s a backup if one of the others should have a problem. I have considered getting rid of it but the ongoing cost is minimal, about $250 per year for the license and insurance. I was happy to see your article, as I have thought about it a lot. It seems your reasoning on it is about the same as mine.
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We are definitely on the same page on this one . . .
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