Financial Freedom Sloth

achieving financial freedom one lazy step at a time

Tag: car

The cost of owning a Vespa 125cc

I have now owned and used – intensifily – my Vespa scooter for 2 full years and with all the articles about the cost of owning a car I found it intersting to see how much the Vespa has set me back these last two years.

When adding all the costs a few things became clear. Fuel costs me around 45 euro a month with me filling up about 5 times a month with a 9 euro refill each. I also seem to have a trafic ticket once per year but wiht the fine increasing each year. 2018 was the cheapest at 50 euro, 2019 came and I got a 75 euro ticket and for 2020 I already am at 130 euro.

* gulp *

I bought the Vespa back in 2017 for 2 750 euro and I tought the I made a semi frugal choice. More expensive than continuing to use the electircal bicycle we allready had but definitely a lot cheaper (and more practical) than a second car. This recap was somewhat of an eye opener concerning the semi-frugal part of that statement.

Fun, practical choice or not ?

Let me start by saying I still really, really enjoy using the Vespa to go to work (see also the speeding tickets).

It is fun and it is the fasted most practical way of getting to work. Last May my work moved to very near the Leuven train station. For me this move had zero impact but a lot of my co-workers had to stop using their car and switch to public transport via train.

Nine years of commuting to Brussels has instilled me with an all consuming hate for the Belgian railway company.

With the move of our company, many co-workers made the switch to the train because getting to the building means facing a huge traffic jam and there are only six available parking spaces in the building itself. And those parking spaces are for the management. The rest of us got parking space a10 min walk away from the building.

So using a car is out.

Using the train is also out because, well I hate them! But it would also mean driving to the train station (10 min), waiting for the train (5min on a good day), riding on the train (10 min, also on a good day) and then a 5 min walk to the office. All in all 30 min which is the same time I need now. Except I am completely flexible when I leave and do not get frustrated on an almost daily basis by the Belgian rail company and there frequent delays (did I tell you I hate them?)

No, the best way to get to Leuven is by bicycle or scooter for me. And I really enjoy using the scooter so to answer the question. Yes the Scooter, for me, was a fun, practical choice.

Frugal choice or not?

Now the good part! The numbers.

This is using the Scooter every working day for a total distance of 40 kms per day, and a few more when i go swimming. So around 10,000 km a year. That’s a lot of km’s to do on a Scooter

In 2018 I spend on the Vespa 2 456,40 euro on maintenance and gas. Then I need to add a 95 euro insurance cost and let’s put amortisation at 275 euro a year.

Grand total cost for 2018: 2 826,40 euro

yes that number gave me sticker schock as well. With an annual cost for a car being estimated to be between 3 000 and 4 000 the Vespa was barely cheaper than a car. In that big amount was a 1 000 euro of extra maintenance because of a faulty cylinder head which should not have happend. But it did happen.

But without eh unforseen big maintenance and average year of using a Vespa scooter should cost around 1 800 euro right? Let’s take a look at 2019 wher eno unforseen maintenance costs happened.

In 2019 I spend for maintenance and gas (and the speeding ticket, didn’t forget that one) 1 279,20 euro. Insurance was again 95 euro and let’ keep amortisation at 275 euro for the year.

That brings the grand total cost for 2019 to: 1 649,20 euro

Whoow, I need to say I am reliefed at that number. It makes a scooter about half the price of a modest car. So not that bad after all. Add in the fact that I kinda, maybe negotiated a tax free bicycle remuneration of 160 euro a month and my home – work transport is basically free.

On the other hand: I spend 1 650 euro a year on getting to work!!

An electrical bicycle would cost almost nothing and take only a little bit longer. And I could use the exercise, just ask my wasteline!

So is the Vespa scooter a frugal choice or not? Compared to a second car? Yes it is. But compared to a decent electrical bicycle with roughly the same purchase price? Nope. Even with amortisation and maintenance a decend electrical bicycle would only cost you around 400 euro a year. So I am spending 1,200 euro more a year.

Moving forward

For me, all this made it once more abundantely clear I need to get my ass moving on the electrical bicycle front. The girlfriend has one I can use, I just want it to go a bit faster. So I need to do this ASAP! Even if I only use the bicycle for half of my workweek I should still be able to save around 500 euro a year.

The cost of owning a car

I promise this is the last post about cars for many, many years to come I hope. But I did find the post of JL collins about the cost of a car really interesting. JL Collins is much better at keeping track of his expenses than I am (I am lazy after all). And he has been doing it for a lot longer than most of us have.

I already knew cars are expensive. There is a reason I didn’t own one till I was 35 and a big part of me being able to build up a stash can be attributed to me not owning a car. But I still found it quite a shock to see his number at 5,000+ USD per year. Gulp!

I then ran my own number for the last 2 years we had our old car and I arrive at an annual cost of around 3,000 euro. And these are the numbers for a second hand car bought for 8,000 euro when it was 4 years old. JL Collins numbers also show the last years are the cheapest and I also know I had a big maintenance bill before I started tracking our numbers. So realisticaly speaking we should be more around 3,500 euro to 4,000 euro cost per year with the 1,000 euro difference with JL Collins being explained by our lower amortizing costs because our car was cheaper than his.

Damn, cars are expensive!

For me and my girlfriend this is almost one full month each year we need to work just to pay for the car we mainly use to get to work! I know it’s crazy but we all do it!

I am curious if other people have other numbers? If so, please post them!

Now, taxes do play a big part in these expenses: 20 biljoen euro of our money flows to the government via our cars each and every year. But even taking those into account we do pay a lot of money for being comfortable while moving.

A small reminder of a simple fact

Mr Money mustache already knew it back in 2011: you can get rich by using your bike more often.

But sometimes we need to remind ourself of these simple facts. The rise in electric bicycles means that you now can cover greater distances faster. And car sharing services are popping up in more places, even our countryside!

Or perhaps we should all just switch to a velomobile?

Buying a new car

So back in December of last year I did mention that our car broke down. And with broke down, I really mean completely kaput! The radiator was leaking even after pouring 2 bottles of Wynn’s radiator stop-leak in it. On top of that it was leaking oil from 5 different places.

The old car

The car (an opel combo) was also around 13 years old and we had driven it for 230,000 km. Spending several thousand euro’s fixing it was definitely not worth it.

Although we did get somewhat attached to it over the years, it had served us well. We bought it second hand for 8,000 euro when it was 3 years old and only had 30,000 km so all in all we good good value for our money with that car. With the big storage capacity it offered we have really moved a lot of stuff with it over the years.

Needing a rental

The moment it broke down was less fortunate. It was just before the end of year holidays. Christmas and New year mean visiting our family all over the country which means driving a lot of km’s. So we rented a car for almost two weeks. In a way it was somewhat of a waste of money but we really needed a replacement car in short notice. We did chose the cheapest possible model. When we showed up at the car rental place that car was not available. Which got us a free upgrade to a brand new Opel Mokka: the fanciest car either us have ever driven!

The car rental got us over the end of year festivities but since our new car was not available in stock we had to wait till early March for the delivery. Lucky for us family had a not often used second car which we could borrow.

Buying a new car

Conventional wisdom among the FIRE community is to not buy a new car. The reason for this is that a new car loses immediately 20% of it s value the moment you drive it from the car lot. Depreciation for a car is the highest the first couple of years. Conventional wisdom is to have somebody else absord that depreciation, buy the car when it is around 4 years old and then drive it until it falls apart. We did this with the Opel Combo and a purchase price of 8 000 euro + 2 000 exceptional maintenance costs for 10 years of use came around 1,000 euro depreciation per year.

Which brings us to the Dacia brand. Dacia is the budget brand of Renault. The cars are build with older technology (the passenger windows are not electric for example, there is no touchscreen to be found anywhere in the car) and they offer only a handfull of options in colour scheme and extra’s. The upside of al of this is that their cars are cheap. On their site they even advertise a starting Logan model (which is what we got) of 7 590 euro!

Do not get suckerd in by this! They are sneaky little bastards at Renault and I honestely doubt they ever sell the basic load out. It doesn’t even have a radio or fog lichts for that price! So ignoring the very basic set-up which only exists for advertising purposes you could still get a brand new car for less than 10,000 euro.

Except if you want a somewhat stronger engine like we wanted. Our family lives 100+ km from us which means using the highways to visit them which means we preferred a somewhat stronger engine. But Renault, being the sneaky little bastards they are decided that if you want the stronger engine you also have to take the full option package. So yes, we bought a new car with all the bells and whistles which even includes airco (first ever car with airco!).

The price for all of this: 11 226 euro. It does include free paint because promo conditions and a 500 euro reduction for are old car (which we were glad to get rid off) but also a 500 euro extra cost to install a towbar to pull our remorque (having a big garden and animals does mean we us our remorque frequent enough to justifiy this expense).

Amortization cost, or revisiting conventional wisdom

If we have use the car for 10 years and 200,000 km’s the amortisation per year will be slightely higher than our old car: 1,200 euro/year instead of the previous 1,000 euro/year. If we can use it 12 years and 240,000 km like our previous car we will be right back at the 1000 euro/year amortizing cost.

Conventional wisdom still apllies, even to Dacia. If you have the time to look around you can find Dacia cars of only a few years old and not to much milage which would push that amortisation below the 1,000 euro/year. But then you need to find a good second hand car! And there isn’t all that much on offer because Dacia seems to attracted buyers like us who buy the car with the full intention of driving it until it falls apart. Because of the low starting price of the car new that bigger amortisation in the beginning doesn’t even matter all that much. If I would have to stick a number on it I would guess you can save around 2,000 euro over 10 years by buying a good secondhand Dacia Logan as opposed to a new one. The extra 2,000 euro negates the luck you need in finding a good second hand car + gets us at the very least 4 years of completely worry free driving a brand new car.

Now, 2,000 euro is still a decend amount. Especially if you take into account a person will at least buy 6 cars during his life. If we had more time we would have probably took our time and looked around for a decent second hand car. But we didn’t have all that much time. Our old car was not safe anymore to drive and we had so much breaking down in December that we just didn’t want to deal with the hassle of looking for a decent second hand car. Honestely, those 4 years of worry free driving without a need to even go to the annual car inspection was really appealing back in December. And also, 11 226 euro for a brand new car, with airco and pull bar really isn’t expensive! So I am going to file this under frugal habits, even if it goes against the conventional FIRE wisdom and might cost 200 euro/year more than going second hand.