01 Aug '11, 5pm
Owning a car is like having a second mortgage
Auckland Transport Blog points out a sobering calculation from the book The Option of Urbanism : The financial cost of owning and maintaining a car is equivalent to the cost of owning a small house. (Well, a small house in a cheap area. But still.) AAA calculated that the average cost of car ownership and maintenance for a typical car in 2006 was $7,800 per year. This covers loan payments, fuel, parking, maintenance, insurance and incidental costs … … The result is that owning an average car is the equivalent of having an additional $135,000 mortgage (mortgage interest is tax-deductible, and this calculation assumes six percent mortgage interest). In essence, drivable suburbanism has probably been shifting family spending away from investing in a long-term appreciating asset (e.g. a house) or savings to a short-term depreciating asset (e.g. a car).