Sunday 26 January 2014

Spend $85-230/week more on housing if you get rid of your car

Summary: For many people in certain stages of life, not owning a car and instead cycling for transport would result in huge financial and lifestyle gains. However, they typically feel they can't afford to live in the areas (typically inner-city) where not owning a car is feasible. This post explains how by giving up your car, you can easily save enough to live in more desirable, cycling-friendly areas.

cc licensed ( BY NC SA ) flickr photo shared by Greg Raisman
Related Posts:
Choose where to live with cycling and your commute in mind
My calculated benefits of cycling for transport

1. The average Australian household spends $193/week on transport - mostly on cars
- This $193/week average expenditure is mostly on cars. Surprisingly, transport is the second biggest category of spending after housing - bigger than Food & Drink and Recreation.

MoneySmart: Australian spending habits (2012)

2. The typical car costs at least $150-200/week in total costs
- $150-$200/week is just the range for light/small cars (at 15,000km/yr), larger cars are even more expensive. Just the Total Standing Costs (0km) for light/small cars are $80-120/week.

3. So if moving to a closer, cycling-friendly location could eliminate needing a car, then you CAN afford it
- The math should be obvious: if you can eliminate the need for a car by moving closer to work (or key destinations) and being able to walk, cycle or use public transport instead, you should strongly consider it. Higher housing costs are not an issue/excuse as you will save $85 to $230 per week by getting rid of the car. Part or all of this saving can be used for a higher rent or mortgage.

- In practice, you shouldn't need to spend on housing all of the money saved from owning a car. Urban cyclists save several thousands of dollars per year and while part of this may go toward living in more desirable, central areas, much of it is also saved for other purposes.

4. Take the opportunities to go car-free while they exist because they don't always last
- If you're a student or young single/couple or temporarily in a circumstance where a car wouldn't be necessary if you could move, then you should grab the opportunity. You can't always easily control where you work/study. E.g. A job that comes up in or near the city centre may be the perfect chance to relocate and go car-free and take up cycling for transport. Choosing where to study (cycling-friendly place) and where to live in relation to it is also a big opportunity to go car free. These opportunities won't always be so easy throughout your life.

Further Info:
Lifehacker: The True Cost of Commuting: You Could Buy a House Priced $15,900 More for Each Mile You Move Closer to Work