Two months ago, we had three cars. Since my son is in college, so I donated one car. Then another car was totaled two weeks ago. We now have one car and are considering to buy a new car. I am thinking about the annual cost to own a car. Assuming the car is purchased with $30,000 to drive for 10 years.
(1) $3,000 annualized cost of the car;
(2) $1,500 insurance, with a teenager at a nearby college counted
(3) $ 400 registration fees
(4) $ 450 parking at my work place
(5) $ 700 gas
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$6,050
If I instead invest the $30,000 in an index fund, I will get $1,500 a year, assuming 5% return (opportunity cost). So the total saving of not owing a car is: $7,550 per year.
I teach at a college, and usually go to work two or three times a week during semesters. I can take city buses for free. The challenge is to wait for a bus in the winter. We do have snows.
My question: (1) Is my cost analysis correct? (2) I am financially independent (and self-defined semi-retired) and $7,500 a year is not a problem. On one hand, I do think a car is not absolutely necessary and my previous cars had low mileages when they were destroyed or donated. On the other hand, I can afford it, and most of my friends have luxury new cars. It does feel better to have a car. Should I buy a new car? (not interested in an old car).