Buying a Second Car for Commuting | Couple Wealth
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So you just accepted a new job that’s awesome but now you have a long commute. If you are spending more time in your car getting to and from work, you may be asking yourself if your current car is the most economical for you.

Can I save money by getting an electric car that gets better gas mileage? Should I get a 4WD vehicle for the winter?

Buying a second car for commuting can be a good decision in some cases. In others, it may not make financial sense. It depends on a variety of factors, such as your current vehicle and how far your commute is.

Let’s take a closer look at when it may make sense to consider getting a second car specifically for commuting.

Replacing vs. Adding a Car

In pretty much every situation, it makes more financial sense to only have one vehicle. When you start to add cars, you will see other costs increase besides just your gas.

To start, you have to pay for the actual vehicle. This can be a lump cash payment from your savings or a loan that you pay down monthly. On top of that, you need to add extra costs for taxes, insurance, repairs, and gas.

By just owning one vehicle, you can cut those expenses in half. It lets you avoid having a second car payment and needing to pay expensive insurance and taxes.

That said, there are some situations where it may make sense to pay for that second set of vehicle expenses.

Why Add a Second Car for Commuting?

The first question to ask yourself is, what is wrong with your current car for commuting? In many cases, your current vehicle is probably fine to use for a longer commute.

The most common reasons that you may want to get a second commuter car can include:

  • You have a gas guzzling truck or SUV that gets poor gas mileage.
  • You have a sports car or motorcycle that doesn’t handle well in all weather conditions.
  • Your car is not reliable enough to survive long drives but holds sentimental value, so you don’t want to get rid of it.
  • You lease a vehicle that has an annual mileage limit that you would go over while commuting regularly.
  • You want to prolong the life of your main vehicle as much as possible by minimizing the miles you drive.

In all of these cases, it really only makes sense to get a second commuter car if you are driving a significant amount of miles every week. Driving a large amount of miles daily, usually at least 50 to 100 miles round-trip, helps to build the financial case for getting a second vehicle.

Picking a Second Car for Commuting

If you decide to get a second car specifically for your commute, it should be one that gets great gas mileage. Newer electric vehicles can often get 40 miles per gallon or more. That is a lot better than a truck that gets 16 MPG.

A smaller sedan may also be a good choice for driving in cities since they are smaller and easier to maneuver. If you have to park in close parking spots or parallel park on streets, it’s much easier to drive a small car.

Another thing to consider for your commuter ride is that it should be reliable but doesn’t necessarily need to be new. Consider buying a used car that is less expensive than a brand-new car and won’t depreciate as much. If you can find a cheap beater that is reliable, it could be the perfect commuting car.

Calculating the Financial Benefits

Let’s look at a few scenarios to see when it makes sense to get a second car dedicated for commuting.

Let’s assume you currently have a truck that gets 16 miles per gallon. If you were to buy a second car for commuting, the monthly cost could be around $400. This includes the car loan, insurance, taxes, and maintenance.

Here is a comparison if you drive 30 miles round trip per day.

Cost of Fuel$3.00$3.00
Monthly Miles (5 days x 4 wks)30 x 5 x 4 = 60030 x 5x 4 = 600
Cost per Month$112.50$45.00

This shows that you would save $67.50 per month by driving a car that gets better gas mileage. However, you still are paying $332.50 extra per month for the second vehicle.

Now let’s see if driving 100 miles per day round-trip makes a difference.

Cost of Fuel$3.00$3.00
Monthly Miles (5 days x 4 wks)100 x 5 x 4 = 2,000100 x 5 x 4 = 2,000
Cost per Month$375.00$150.00

As we can see, the more you drive, the more you save. Driving 100 miles per day increases your monthly savings to $225 and reduces your net impact to $175 per month for a second car. This is still an extra $175 per month that you would not have to pay if you only had one vehicle.

Save Money Driving a Beater

By playing with these numbers, you can find a situation where it does make financial sense to buy a second car for commuting.

For example, you could buy a beater car with all cash and keep your extra expenses to $100 per month. This would actually save $125 per month, if you drive 100 miles per day.

In most cases, buying a second new car that could cost $20k, $30k, or more will increase your overall costs. Buying a cheaper car that gets great gas mileage could help to reduce your expenses.

Are Cars Assets or Liabilities?

When you buy a vehicle, you may be wondering if it is an asset that contribute to your net worth. A car is considered an asset because it can generally be sold for some amount of money and has value.

When you are calculating your net worth, most people do not include cars and other personal items. Your home mortgage should be included in your net worth since it serves as both a large asset and liability. Vehicles, boats, bikes, clothing, and other items are usually not counted because they usually depreciate in value over time.

Cars are depreciating assets because they lose value with time. A brand new $30,000 car may only be worth $25,000 a year later. As you hold your car longer, its value will drop until it may only be worth a few hundred dollars for scrap metal.

Bottom Line

Everyone’s car situation is different and you should do your own calculations when trying to decide if you should buy a second vehicle. Take into account the upfront cost, lease, taxes, insurance, maintenance, and gas costs.

Buying an inexpensive commuting car that gets better gas mileage can help to reduce your gas costs. In some situations, this can help to reduce your overall expenses.

Often-times, this is not the case and a second vehicle will actually increase your costs. If you can, try to consolidate to one vehicle that will fit all of your needs. This will avoid having a second car payment and all the extra hidden expenses that can really add up.

Besides the gas-saving incentives, you may choose to use a second car for commuting for other reasons. This could include helping to reduce emissions, be able to carry more cargo, or avoiding mileage fees for leased vehicles.

Not sure what to do? Leave a comment with your personal situation and we’ll try to help analyze your options.

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