Fuel for Thought

Tin Can; Visualizing Costs

A couple posts back, member Road Eyes asked how much I put away for my next vehicle when projecting my costs. My rough rule is that the first week pays for the vehicle. Second week pays the fuel. Third week (maybe a couple days more) goes to the other stuff like maintenance and fees. And the fourth week or whatever is left goes to me. In this plan, current obligations get first priority, second priority goes to obligations that are going to come up, and last to get paid is me.

A more specific way I look at the first week is that it needs to pay the equivalent of a vehicle payment on a three year loan for a new vehicle. In my case that is in the neighborhood of $1200. People gasp when they see that number, but it is the cost of operating a new vehicle. The average person wants to finance their first van. How long will it take to get out from under a new Sprinter? Using the three year loan, it takes three years to pay off the loan and another three years to save for the next. That is a six year project. And since most people aren’t going the three year loan route, I’m pretty sure their vehicle will not support buying their next vehicle, which means having to approach ten years before getting ahead of the wave.  This is why I try to convince people to start with a paid for vehicle. The sooner an owner is out from under obligations to others, the sooner they begin working for themself.

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