We Finally Sold Our Second Vehicle and Became a One-Car Family
I was up on the third floor watching Netflix on a Sunday night when I heard Mrs. Enchumbao asking whether her Suzuki Aereo had tilt wheel, front wheel drive and alloy rims. From that moment on, I knew that she had finally decided to take the initial steps to put our second vehicle on the market. The process of selling the Suzuki was long overdue. We moved to our new rental about a year and half ago with a short commute to work, during which we carpool, so the Suzuki was parked most of the time. We kept the car because we were frankly lazy to put it on the market and for conveniences that weren’t really warranted, whereas selling it would allow us to invest the cash and save on auto maintenance, insurance and further depreciation.
After writing an awesome description of the car and checking the resale value on other sites and Kelley Blue Book, Mrs. Enchumbao posted the ad on Craigslist. Within minutes from the post going live, she started to get responses and the first potential buyer showed up within an hour. It didn’t work out with the first prospect, but by Monday afternoon we already had another potential buyer. This second prospect was a young man who recently arrived from Puerto Rico and needed a basic car to get to and from work. He showed up with with a ton of $20 bills tied with a rubber band, test drove the Suzuki, liked it, agreed on a price and the deal was set. It was sold within 24 hours from posting on Craiglist! The buyer didn’t have a registered license plate yet, so he asked us to drop off the car at his place. As fellow immigrants, we know how tough things can be when you first arrive, so we kindly agreed to home deliver the Suzuki and went in two vehicles. It became the perfect chance for Mrs. Enchumbao to properly say bye to her baby of 10 years.
The Suzuki Aereo was Mrs. Enchumbao’s first car during college. Instead of financing a brand new car after graduation, like many recent college grads do, she kept the pre-owned Suzuki which she paid for in cash. This means that during the years that followed more of her money went into the investment bucket instead of paying for finance charges and additional principal. This is key to reaching financial independence early. When you spend less than what you make you’re setting yourself up for one day cutting your dependency on a weekly paycheck.
Having one car for a couple that works outside of the home can be challenging, but it’s often doable. It’s even doable for a bigger family. When my family first arrived to the U.S., we did just fine with one car and there were at least seven of us living in the same household. When you don’t have much, you make do with what you have. The main advantage that Mrs. Enchumbao and I have is that we work at the same company. We made it a point to move closer to work, so that we could avoid our previous nasty commute. If one of us needs the car for any other reason, the other one could take the company shuttle to work from a nearby train station, which is only two blocks away. If we need to go separate ways on a weekend, one of us can take the train to downtown Philadelphia and it’s only, that’s right, two blocks away!
If you want to reduce vehicle expenses, you can explore ways to reduce your dependency on a vehicle by doing things such as moving closer to work, carpooling with coworkers, or moving closer to public transportation. And, of course, you also have the option to change jobs if your living location is a higher priority.
It’s been a couple of weeks since we sold the Suzuki now and we’re doing great with just one vehicle. That’s one less car to clean during snow storms next winter! We also avoided the registration and insurance renewal that was due this month and already invested the sale proceeds into a Roth IRA, so the savings have already begun and are working day and night for us by creating passive income! Caching, caching!
While we admittedly took longer than necessary to become a one-vehicle pad, it’s better to start saving later than never. The biggest costs for most people fall into the housing, food and transportation category. As a matter of fact, a recent article on The Atlantic reveals that the average car owner in the U.S. pays $12,544 a year for a car that puts in a mere 14-hour workweek. Tack on another $1,908.14 if you drive an SUV. Therefore, if you can find ways to reduce these costs and keep them down, half of the FI battle is won.
But I am not ready…
If becoming a one-vehicle household is not a feasible option for you right now, you can also consider the following money-saving options:
- Switching to more gas-efficient or electric vehicles.
- Switching to older vehicles. Buying or leasing new cars works well for some people: those who like it for shallow reasons, those that don’t have any money to put down and need a dealer to finance the car, and those afraid of a used car breaking down. As you know, when you are on the path to FI, the first thing you do is save money in an emergency fund. If you have one for your car expenses, you can afford to fix a broken part, while saving on lower insurance premiums and overall car cost.
- Self-insuring certain aspects of your car and/or raising your deductible.
So, start working on your Craigslist ad, or better yet, if you can go car-less, more power to you!