go car free course

Lesson Two

Calculate Your Real Car Cost: 100 Hidden Expenses of Owning a Car.

By Chris Balish, bestselling author of How to Live Well without Owning a Car

“If you buy what you don’t need, you steal from yourself.”
 – Swedish proverb

In Lesson One, you learned how owning or leasing a car, truck, or SUV wreaks havoc on your finances. We showed you how car ownership can destroy your ability to save for a house or to start a business, and how it can quietly rob you of financial freedom and a secure retirement.

Not only do cars devour a huge amount of money, but for some reason people don’t notice this. Most people have little idea just how much their car is costing them. In this lesson we’ll show you how to calculate what your car is really costing you. Prepare for a shock.

Step One: Calculate Your Current Car Expense

I’ve helped thousands of people calculate how much money they can save by getting rid of their car and going car free, and I’m going to show you how to do it in this lesson. The great management expert Peter Drucker is quoted as saying, “What gets measured gets managed.” I believe this is particularly true when it comes to personal finance.

Essentially, Drucker’s quotation means that when you measure or quantify an activity or a way of doing something, you are forced to pay attention to it. When you pay attention, you begin thinking of ways to improve, streamline, and optimize. So the first step in determining if a car free lifestyle is a fit for you begins with a simple spreadsheet.

Are You Clueless about Car Costs?

Most people have little idea just how much their car is costing them. If you ask someone what they spend each month on housing, you’ll get a pretty accurate answer. “My rent is $1,800, cable is $90, and electricity is about $70.” But when you ask the same person how much their car costs each month, they often have no clue. Or they just add up the car payment, gas, and insurance, believing that’s all there is to it.

This gross underestimation of how expensive cars are to own is so widespread it’s a national epidemic. The misunderstanding is fueled by an endless barrage of automobile advertising purposely designed to make cars seem more affordable than they really are. Commercials that promise “A brand new car for $199 a month! Just $199 a month!” are so misleading they should be illegal.

“Advertising: the science of arresting human intelligence long enough to get money from it.”
 – Stephen B. Leacock, Economist

How many college students do you know who are so broke they can only afford mac-n-cheese for dinner, yet they just financed a new car to get them to and from class? They probably thought, “I can afford $199 a month.”

How many working adults do you know who constantly complain about money problems, yet they just leased a brand-new SUV? The sad reality is that cars come with dozens of unavoidable expenses that the average car owner either doesn’t notice, doesn’t want to notice, or just accepts as part of life without giving any real thought to the consequences.

Car Free Success Story

My decision to get rid of my truck was a financial one. While I could afford the payment, the insurance, the gas, and the occasional parking tickets, it relieved considerable pressure not to have to do so. So I sold my Ford Ranger pickup truck and found I could indeed live relatively easily without an automobile.

The many, many costs associated with cars add up so quickly and silently, usually you don’t even notice them. You only notice how little money you have in your bank account and wonder why. Not having a car allowed me to move to a newer, nicer apartment in a better area closer to work. And I can now easily afford to go out to dinner and movies.

My financial situation is also more predictable without an automobile. I never knew when something would break and cost anywhere from $50 to $1,000. In those situations, I felt totally at the mercy of repair shops. Car free life does require making small adjustments in your routine and how you accomplish certain tasks. But with a little creativity and knowledge, I think almost anyone can live car free. I highly recommend it.

Marcel F., 26

Laboratory Technician, St. Louis, MO

The table below lists the average annual cost to own different types of vehicles. This is according to data from the American Automobile Association (AAA) which has been tracking total cost of vehicle ownership for decades.


New Vehicle Category Average Annual Cost Calculated by AAA
Small Sedan $7,114
Hybrid $7,736
Electric $8,320
Small SUV $8,394
Medium Sedan $8,643
Minivan $10,036
Medium SUV $10,265
large Sedan $10,403
Pickup $10,839

The average American car owner will save $9,282 per year by getting rid of their car and going car free. That equates to $773 per month. If you drive an SUV or pickup truck you’ll save even more: $10,265 per year, or $855 per month.

Source: American Automobile Associaiton 2019 Your Driving Costs Study

The figures above are a good baseline, but the only way to know for sure what your car free savings will be is to run the numbers for your own car. This is where most people make a common mistake; they forget about dozens and dozens of car expenses and therefore they vastly underestimate what their savings would be by going car free. Check out my video titled “The Hidden Costs of Car Ownership” below.


“A lot of these are costs that many drivers probably don’t think much about, but they really add up over time.”

John Nielsen, Managing Director of Automotive Engineering & Repair, AAA

Car Free Success Story

It seems that people often weigh the economic cost of transportation inconsistently. For example, I have heard people complain that the bus costs $2.00, but not complain about the enormous amounts of time and money they put into their car. I suppose $2 for the bus is cash, which one must physically hand over. A car, on the other hand, has many more hidden costs, which people seem to accept as a given without really questioning why they pay it. After living without a car you begin to see this folly. I guess my advice would be for people to weigh all the economic costs: time, money, aggravation, etc., as fairly as possible.

Jessi B., 28

Graduate Student, Pittsburgh, PA

To figure the true cost of owning your car, you must add up a lot more than just your monthly payment, gas, and insurance. The website Edmunds.com has a nifty calculator tool called the True Cost to Own (TCO). The TCO calculator includes the following costs: car payments, depreciation, financing cost, insurance, taxes and fees, fuel, maintenance, and repairs. That’s getting warmer, but it’s still not even close to a complete list of all car related expenses.

The Total Car Cost Worksheet is my own original research, and it lists more than 100 car expenses. Please print this page and then take your time filling in the blanks. Better yet, click on the button at the bottom of this lesson and I will email you the Total Car Cost Worksheet as an Excel spreadsheet; it makes the calculations much easier because it will do the math for you. Once you add up all the categories you will see how much money you’ll save if you ditch your car.

It’s best to run these numbers based on a full year, because you won’t incur every expense in every month, and many will be lumped into certain times of the year. If you don’t have actual receipts and hard data, it’s okay to estimate, but be as accurate as possible.

Total Car Cost Worksheet


Annual Cost

Total Car Payment x12 (include sales tax) ___________
Car Payment Late Fees ___________
Total down payment divided by the number of years financed ___________
Other up-front dealer fees divided by the number of years financed
(destination charge, dealer prep fee, gas-guzzler tax, and so on)
Annual auto insurance premiums ___________
Annual fuel cost ___________

Estimated annual depreciation*

(*Calculate depreciation by taking the price you paid for the car, then subtracting the car’s current trade-in value, available at www.kbb.com, then dividing by the number of years you have owned the car. Or use figures from Edmunds.com TCO tables. If you lease your car, please see the explanation just after the total.)

Annual local taxes / local property tax ___________
Annual state taxes / state property tax ___________
Registration and license fees ___________
Emissions/environmental/smog test ___________
Repairs needed to pass smog test ___________
Car washes (estimate based on number of car washes per month x 12) ___________
Monthly parking at work (x 12) ___________
Monthly parking at home (x 12) ___________
Annual parking at sporting events, concerts, and the like ___________
Airport parking ___________
Parking meters ___________
Valet parking at restaurants and clubs (including tips) ___________
Routine maintenance (include all parts, labor, and tax)
Tune-ups ___________
Scheduled maintenance (at mileage intervals) ___________
Oil changes ___________
Antifreeze / winter maintenance ___________
Transmission flush/lube ___________
Radiator/coolant flush ___________
Replace hoses and belts ___________
Replace windshield wiper blades ___________
Other routine maintenance ___________
Mechanical repairs (include all parts, labor, and tax)
New brakes ___________
Muffler ___________
Alternator ___________
Starter ___________
Fuel pump ___________
Headlights, fog lights ___________
Mirrors ___________
Air and fuel filters ___________
Radio antenna ___________
Other ___________
Body and cosmetic repairs ___________
(door dings, dents and scratches, touch-up paint, windshield chips, hail damage) ___________
Tires and wheels
New tires (include all parts, labor, and tax) ___________
Cost to repair flat tire(s) ___________
Cost of clothing ruined while changing flat tire ___________
Towing fees ___________
Tire rotation ___________
Wheel alignment ___________
Snow tires and chains ___________
Electrical and computer repairs ___________
New battery ___________
Computer systems ___________
Car products, accessories, and subscriptions
Satellite radio installation, parts, and labor ___________
Satellite radio subscription (monthly fees, taxes, and surcharges x 12) ___________
On-Star or satellite navigation subscription (fees and taxes x 12) ___________
AAA (American Automobile Association) membership  ___________
Car alarm installation, parts, and labor ___________
Radar detector ___________
Cell phone charger ___________
Cleaners (e.g. Armor All, Windex, tire foam, wheel degreaser) ___________
Car wax, cloths, buffers ___________
Gas tank additives ___________
Windshield washer fluid ___________
Ice scraper ___________
Car stereo, amplifier, CD player, car iPod adapter, stereo speakers ___________
(include installation, parts, and labor) ___________
Air purifier, air fresheners, fuzzy dice ___________
Tools, wrenches, spark plugs, etc. ___________
Repair manuals, do-it-yourself books ___________
Jumper cables, de-icer, sand, salt, emergency kit ___________
Maps and map books ___________
Hub caps, wheel locks, alloy wheels ___________
Seat covers, steering-wheel wraps ___________
In-car organizers ___________
Window shades ___________
Window tinting ___________
Car covers ___________
License plate frames, decals, pin striping ___________
Mud flaps, splash guards, running boards ___________
Interior floor mats ___________
Circuit breakers, fuses, and electrical connectors ___________
Tow hitch installation, hitch covers, and wiring ___________
“Smart car” subscriptions like Apple CarPlay ___________
Winter emergency kit ___________
Other car products ___________
Extended warranty cost per year ___________
Parking tickets (include late fees, doubled fines) ___________
Speeding and traffic tickets ___________
(Including late fees, doubled fines, court costs, and any increase in insurance premiums)
Tickets for expired tags ___________
Towing and impound fees ___________
Traffic court fees ___________
DUI/DWI costs and fines ___________
Attorney fees ___________
Car theft/break-ins/vandalism (estimate total cost) ___________
Car crash costs and attorney fees ___________
(include any increase in insurance premiums)
Medical bills from a car crash ___________
Lost work time and wages from car crash ___________
Property damage from a car crash ___________
Lawsuit from car crash (estimate total cost) ___________
Auto insurance deductible if you filed a claim ___________
Increase in premiums if you filed an insurance claim ___________
Locksmith fees for locking keys in car ___________
Cost to have new keys made ___________
Tolls ___________
Montly toll pass, EZ Pass ___________
FastLane or express lane fees ___________
Cost to have driveway shoveled after snowfall ___________
Cost for rock salt to spread on frozen driveway ___________
Cost to repair garage door that you drove into ___________
Cost to replace electric garage door opener ___________
Driving around in your car expenses
Estimated monthly fast food expense from the drive-thru ___________
Estimated cost of shopping in 7/11 or convenience stores while driving ___________
Junk food and drink purchases at gas stations  ___________
MONTHLY COST (total divided by 12) ___________

If you lease your car you do not technically have depreciation, since you don’t own the vehicle. However, you do have to give the car back at the end of the lease. This is essentially a balloon payment at the end of the loan. Additionally, all lease contracts require the lessee to pay a mileage overage fee for miles driven in excess of those allowed in the contract.

So, when figuring the total annual cost to own your leased car, take the balloon payment amount (usually described as the “end of lease purchase price” in your contract), add any estimated mileage overage fees plus any turn-in fees at the end of the lease, then divide by the number of years in the lease. Write this amount in the “Depreciation” line in the Car Cost Worksheet above.

Of course, living car-free doesn’t mean you won’t have any transportation expense. You will. But it will be a fraction of what you’d pay to own even the cheapest used car. For example, Anne Scarletta lives car free in Portland, Oregon. She wrote me this email itemizing her car-free transportation costs.

“My estimated annual expense for bicycling is around $200 per year. This includes a few tune-ups and occasional replacement of bike parts or lights. When it rains, I take the MAX light rail train or the bus to work. Estimated annual expense for those fares is $25 per month ($1.25 x 20 trips). A few times a year when I really need a car, I rent one. My estimated annual expense for car rentals is $250. Total annual car free transportation cost: $750.”

Anne Scarletta, Car Free in Portland, OR

Your annual car-free transportation costs could be higher or lower than Anne’s, depending on how far you live from work, how often you rent cars, ride mass transit, take Uber, airport shuttles, and so on. But in my experience $700-$750 per year is about average for car free transportation cost. And remember, we’re comparing that to $9,282 per year to own a car.

To get an accurate picture of how much money living car free will save you follow these steps:

1) Use the worksheet above to calculate the total annual cost of your current vehicle.
2) Estimate the total annual cost of all the car free transportation you expect to use.
3) Subtract #2 from #1.

This is how much money you can expect to save by going car free.

Related Question: How Much Does a Monthly Transit Pass Cost?

In most cities, a monthly transit pass costs around $65. But many employers now subsidize monthly transit passes and even Uber rides. Inquire with your HR department. Plus, there are usually discounts for students, seniors, and others. There are often discounts and freebies to be had on alternative transportation because most cities are trying to incentivize people to stop driving.

Now let’s move on to Lesson 3, Un-Safe Space: How Cars Destroy Your Health and Lower Your Quality of Life.

In Lesson 3 you’ll see how living car free can greatly improve your quality of life. It can give you greater peace of mind, lower your stress level, improve your health, eliminate hassles, provide more social interaction, and result in more free time. Skeptical? Check out Lesson 3.