Going car free – The real cost of motoring

The real cost of car ownership is one of the trickiest expenses to determine. Unlike predictable expenses such as public transport, renting a place to live or food costs, it is impossible to accurately estimate the true cost of motoring. This can be a problem for financial independence planning because you need to be reasonably certain of what your expenses are. Previously, I tried to ignore this paradigm but the relentless rules of simple arithmetic will always come out on top.

This post is timely as I will be going into a period of being car free. This is involuntary as I had no intention of getting rid of my car until the reality of car ownership hit me with a bang. While driving from work a few weeks ago, I was involved in an incident with another vehicle at a mini-roundabout. This resulted in my car getting written off and getting sent off to the scrap heap for just £100. I was shocked at how quickly things can change; I purchased the car (a 2007 BMW 118d) 6.5 years ago for £9,500 which has virtually gone down the drain in an instant. The car’s value had depreciated substantially since so it would not be worth much anyway.


This situation presents me with several options.

Option A: Normally I would attempt to immediately reinstate my previous position by getting a like for like replacement vehicle. Obviously, this is not as simple as it seems as it would mean acquiring a used 12 year old similar model with over 100,000 miles on the clock. This is very unwise due to the amount of potential problems with such a car. At least I knew what work had been done on my previous car.

Option B: Alternatively, I could follow a similar approach to how I purchased the previous car by looking for a 4 or 5 year old used vehicle. This would have a huge impact on my finances as the cost would be way in excess of my emergency fund. The shortfall could be made by borrowing extra funds which I would not do.  Alternatively, I could dip into my investments or other savings. This is unwise; a classic case of swapping assets (investments) for liabilities (car ownership and purchase), therefore would leave me a lot poorer in the long run.

Option C: This is really hard to take personally; car ownership is often associated with status and a sense of freedom, but going car free has to be a consideration. A few weeks ago this option was unimaginable but after doing an in-depth analysis of what it entirely cost me to run my previous car this is not such a crazy option. I had to ask myself of what my real needs of transport are and unreluctantly concluded that for me, car ownership had been a nice to have, a very costly one at that. Here is why.

The true cost of car ownership

Over this 6 year period, owning and running the car cost me a total of nearly £30,000 (US$40,000), which is around £4,500 (US$5,900) a year or £370 (US$480) monthly. Costs equated to 44 pence per mile over an average of 10,000 miles a year which could be used to calculate a reasonable estimate of a journey’s true cost. This is an astonishing amount as I had considered the car, from an era when diesels where still being promoted by the government, to be well made, fuel efficient and cheap to tax.

I listed all the line items of everything I remember spending on the car to reveal the harsh reality. Here is the result:

BMW 118d: Total Cost (£) Of Ownership 2012-2018

ProportionItem6.5 YearsYearlyMonthly
32.75%Fuel. 10k/y, 42mpg, 52L, 134p/L1,450121
0.68%Road tax303
1.02%Breakdown cover454
1.13%MOT test504
2.26%Brakes – £300 / 30,000 miles1008
2.64%Tyres – £350 / 30,000 miles11710
0.90%Brake fluid service – £80 / 2 yrs403
2.26%Oil service & filters1008
6.95%Timing chain (N47) & clutch repair2,00030826
1.39%Oil filter housing  – after oil leak400625
0.69%Parking brake snap repair200313
2.26%Parking & tickets & tolls1008
1.04%Audio: head unit+tweeters300464
Overall Cost incl. depreciation28,7834,428369
Running costs (cash flow)19,0332,928244

*The above list seems very long but it is the truth of the minimum spend on the vehicle. The figures would be higher or lower for other vehicles and usage. If I had bought it new, costs would have been north of £500 a month which could easily be more than rental/ mortgage costs.

What next

Such figures don’t lie and I would ignore them at my own peril. Another possible option is to purchase an electric vehicle (EV) which has substantially lower running costs due to a simple design (electric motors have less than 20 moving parts) and does not emit harmful emissions.

However, EV  purchase costs are still high, even on the used market. Despite the high initial purchase cost, I have calculated that there would be huge savings over the same 6 year period by purchasing an electric one. For example, an EV bought for £14,000 would cost a total of £20,000 to run over 6 years compared to nearly £30,000 for a petrol or diesel car purchased for £10,000.

For now I will go car free for a while as I actually do not need one. Commuting to work would be by a 20 minute train ride plus less than half an hour’s walk. Other trips would be by train, tram, taxi, coach or bus. This is not a problem in London. For inaccessible locations or other uses I will use rental cars or vans when needed. I estimate that these alternatives combined will cost me a quarter when compared to car ownership and the proceeds will be invested or put towards an EV.

I expect that this will also boost my savings rate by over 6%, alleviate the stress of having a metal box sat on the driveway, avoid aimless trips, parking, roundabouts, traffic lights, schools, fines, endless maintenance, break ins, road rage, scratches and prevent me from sitting in or battling rush hour traffic while risking a crash.

I have already saved an unexpected initial £50 by cancelling my breakdown cover; this will be promptly invested into Vanguard index funds. The benefits are substantial as I have not even gone into the impact of opportunity cost, where the above costs would be invested wisely. If car travel is really needed I will consider going electric in future.

It is incredible how such the seemingly innocuous decision of whether to drive or not can have far reaching consequences on your personal finances and possibly on when (potentially years) or if you will achieve financial independence.

*The AA has a useful guide about car running costs here.

What do you think? Are these costs realistic for you? What are the pros and cons of owning a car?

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8 thoughts on “Going car free – The real cost of motoring

  1. Stefano

    Nice write up. Sorry to hear about your car, maybe it was a blessing in disguise. I used to own a Beemer, brilliant memories, but it ate tires for breakfast being a rear wheel drive. I remember pulling away from the traffic lights in 2nd gear, so the back wheels wouldn’t spin (as much) and burn rubber. 1st gear wasn’t an option!

    Going car-free will be tough (and emotional) in the beginning, but you’re making the right decision. Yes, so many options moving forward and you’re taking advantage of that cost opportunity now. Fair play to you.

    1. Simba Post author


      So far it is certainly looking like a blessing in disguise. I thought that it would be emotional to be car free but this does not seem to be the case once i have had a look at all the options available for getting around and looked hard at what the car actually cost me. A Beemer can be fun but every repair or service seems to cost a bit more. It seems like I owned the car for for no real use but as some kind of status symbol as I can still get to most of where I want to, often faster.



    A troublesome car is not only costly but can be a mental nightmare of playing the game of should I cut my losses and get a different one or keep pouring money into it…I drive a 2004, so I know it’s not going to last forever but so far so good!

    1. Simba Post author


      True, car ownership can be a mental nightmare as it always seems like a new problem appears every few months so you have to keep sinking money in it. Depreciation in value happens daily and only hits you when you have to suddenly buy new car for a reason beyond your control.


  3. Noemi

    Congrats on going car free!
    After having shared cars with my housemates for years, when I left the house to live more centrally in town, I have gone car free. I bike to work or to see friends and for longer trips I take the train.
    Maybe cycling could be an option for you, too? Instead of the 30 minute by foot part of your trip. Just buy a used bike and a good chain to lock it close to the train station.

    1. Simba Post author


      Since going car free, I am becoming more aware of the benefits like being able to get to most destinations faster than before. Driving everywhere makes you oblivious to other better and safer ways of getting around. I live centrally in town too so find most shops and services within easy reach. My walk to the train is ok as I am now getting a lot more exercise before.

  4. Mark

    Great post! Congrats on getting shut of the expense!

    I always say, the only asset that depreciates faster than a car is food. Cars are a close second (unless they’re classic collector cars).

    Just found your site and enjoying reading so far.

    Keep up the good work!


    1. Simba Post author


      Cars are a major expense and definitely depreciate at an alarming rate. Even the used ones which also tend to get more expensive to repair with time. It is hard to win with car ownership. Previously, I tried to hide may head in the sand and ignore the true costs but I found this to do now that I have ran the figures.



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