I recently got into a disagreement on the “Mustachians on Facebook” group with a few people who were trying to convince me that driving is an essential part of life, and for some people there is simply no way around high monthly car costs. No matter what ideas I proposed to reduce their costs, they responded with something similar to “I already thought of that, but it won’t work because… (I’m not willing to budge on some lifestyle preference).
These commenters were so busy thinking up excuses that they used up all the energy they could have used to come up with actual solutions to their personal situations. This got me fired up, so I decided I would write another “educational venting” post, as one of my commenters coined it. Before long, the post ballooned into what follows, which I am calling, “The Car Problem.”
Cars are pretty dang cool. Shiny, high-tech and powerful, cars provide a sense of freedom and even independence to billions of drivers around the world. But personally, I can’t wait to stop driving. In fact, one of the things I’m looking forward to most about FI is the reduced time in my car. Due to a complicated number of factors, I still have to drive my car to the office every weekday. I still have to sit in traffic each morning and evening, as aggressive drivers dangerously weave in and out of the lanes around me, perpetually late for their next appointment.
I drive the speed limit, and occasionally need to be in the left lane for a turn, which is apparently not OK in Florida. I’ve seen my fair share of one finger salutes in my time on the road, mostly from angry, unhealthy drivers. Luckily, with our FI window closing in rapidly, these clown car escapades should be behind my wife and I in the next year or two.
Across the world today, there are over 1 billion passenger cars on the road. In the United States, there are 1.3 people for every car, which means that nearly EVERY adult in the U.S. drives a car. While the shining example of successful assembly line mass production, cars are actually making us poor, sick, and miserable.
Your Car Runs On Money
As hinted to in our post “Why You Can’t Retire”, most people severely underestimate the total cost of a car oriented lifestyle*. Let’s do some math. Suppose you buy a shiny new car. The average car price in 2016 was $34,000.00, so let’s go with that. Assume $4k down payment, dealer financing of 4% for 60 months, and we get a monthly payment of $550 per month, with about $50 going to interest, on average. Now, let’s assume you live in suburbia and drive a 70 mile round trip daily commute to work (as is the case with one of my family members). You work 262 workdays per year and this gets you to 18,340 miles. Then assume on weekends you drive 50 miles per day and our total miles driven for the year have reached 23,490.
If we trust the IRS rate of $0.535 cents per mile, we get a total operating cost of $12,567 per year for wear and tear, fuel, car insurance, registration, and depreciation. That’s $1047.26 per month. And this is just one single car. Many homes on my block have three cars these days!
Sure, we can play financial games to bring the monthly numbers down… we can take out an even longer loan (72 months is the new 60) and pay even more money in interest. We could even be responsible and get a smaller car with better gas mileage. But it doesn’t actually fix the problem. There’s no way around it: The total cost to drive a car is really expensive. A brand new car is even worse. Two or three cars in your driveway? It’s no wonder finding money to save for investing is hard! The average car costs $10k per year just to own, not even counting the cost of the car itself. Most Americans pay between 20 and 35% of their take home pay to these mechanical overlords…
OK, let’s make the math simple and use $1000 per month total cost to drive. Now, let’s look at the opportunity cost of a $1000 per month cash flow. If we invest it in the S&P500 index earning 7% interest, we’d have over $1 million saved in thirty years! Instead, if we just use it to pay for an additional car, we have… an additional hunk of metal sitting in the driveway. Instead of appreciating, like the investment, the car depreciates over time. And it is an extremely inefficient resource, sitting parked, completely unused, over 23 hours per day on average.
Oh- I almost forgot to include the cost of car accidents! Growing up in the South Florida area, things are pretty bleak. Car accidents happen to most families every few years. It’s big business for the attorneys, insurance companies, and medical community. Everyone gets paid when you have your inevitable crunch. Except for you, of course. Given a population of almost 7 million people driving longer commutes to work than ever before, statistics ensure your next accident is only a few years away if you live in the Miami metropolitan area. I’d wager there’s a number of other metros across the country in a similar position.
Your Car Makes You Sick
This isn’t really a surprise to anyone anymore. Cars pollute the air, contribute to climate change, and use up what remains of our limited natural resources. If the price of gasoline included the cost to our environment in the sales price, it would cost well over $10 per gallon. But gas is cheap, so it’s easy for us all to look the other way and keep on with our usual daily driving routine.
But forget about the environment. Forget about those joggers and bikers and their dreams of clean air for a second. Did you know that driving is actually making you sick? Sitting in traffic is one of the most unhealthy activities you can do. It increases your blood pressure, anxiety, cholesterol levels, and more. Not just for the duration of your commute, either. These changes accumulate over time and lead to premature death.
And let’s not forget about mental health: over time, the stress of traffic accumulates, leading to poor decision making on the road. Like the time a family member decided to try and overtake a slow moving van at the last second before their lane ended, only to have the van hit the accelerator. This person literally risked their life and the lives of everyone in our car because they were tired of waiting behind a slow van. This aggression causes others to in turn drive more aggressively, making the roads more dangerous and increasing the likelihood of accidents. In extreme cases, this accumulation of stress culminates in road rage, where people are injured or even murdered because someone didn’t like someone else’s driving decisions.
The icing on the cake is that cars also keep you sitting on your ass, burning zero calories, wasting both your free time and your mental energy. If you didn’t already know, sitting for extended periods will absolutely shorten your lifespan, even if you try to exercise vigorously every day to compensate. And it also helps keep you lethargic. We rely on our motorized comfort bubble clouds to keep the temperature at precisely 73 degrees year round and protect us from the dangers of water falling from the sky. In modern car-centric life, we very rarely need to work our muscles. So some of us drive our cars halfway across town to a gym, which we pay for, so we can simulate working them as we would in our days before cars. Others drive a few hundred feet for even more ridiculous reasons.
Here’s a funny example: each day at work, I go on walks around my building to stretch my legs from a long day of sitting. Every few hours, I notice a line of five or six cars parked on the street just off of company property, a few hundred feet from the building. All the cars have their engines running, music playing, A/C running full blast, and windows rolled down. What’s going on here?
As I went in for a closer look, I realize that all the people sitting in their cars are smoking cigarettes. This is the new, anti-social, climate controlled smoke break of the twenty-first century, fueled in part by my employer’s strict ‘no-smoking on company grounds’ policy and in part by the sheer laziness of my coworkers. If you can think of a more ironic example of simultaneous damage to health, wealth, and environment, I’d like to hear it.
Your Car Is Not Safe
Safety is another issue. There’s no denying that driving is inherently unsafe. It’s actually the most dangerous activity most people engage in on a day-to-day basis. In 2015 there were 1.25 million traffic fatalities across the world, yet everyone is perfectly OK with this fact. We collectively freak out about terrorist attacks that killed 28,328 people worldwide that same year, yet we don't even blink before getting behind the wheel each day for an activity an order of magnitude more dangerous. In fact, did you know 93% of drivers think they are better than average at driving? Do you see anything wrong with this statistic?
A few years back, my wife was involved in a very serious accident that totaled her car. A county sheriff's officer ran through a red light at full speed, with no lights or sirens on. My wife happened to be in the intersection at that moment. Many of us like to think our sense of control makes us a good driver. That it wouldn’t happen to us if we were behind the wheel.
But it has nothing to do with driving skill. As an engineer, I appreciate the statistics and probability at play behind the scenes here. Had my wife left the house a few milliseconds later, the impact would have happened directly on her driver’s side door, and she might not be here today. Had she left a few seconds earlier or later, it would have been someone else in the accident. How do you mitigate this risk? It’s quite simple: you drive less.
Car accidents aren’t the only danger on the road. Fatalities to pedestrians, bicyclists, animals, or anything else in the road is also a real concern. I'm not particularly happy about this, but my wife and I happen to live in the #2 most deadly city for pedestrians in the entire nation. In fact, just last week a 4th grader was run over and killed on his bicycle while riding home from school a few blocks from my home. This was the third student pedestrian death this year. Now, this news sounds horrible, but it happens so frequently in the headlines that I don’t even flinch anymore. I’ve been completely desensitized. Most of the time in Florida the drivers in these incidents don’t get much more than a fine, literally getting away with murder.
I’m not trying to talk you out of biking or walking: statistically speaking they are both still significantly safer than driving in a car. What I'm arguing is that many in suburbia today live in neighborhoods that are no longer built for human beings. The more people we can get out of cars, the safer and more friendly our cities will become. Part of the problem is that drivers just aren't paying attention to the world around them, and many have forgotten (or never learned) the rules of the road.
We could all do with a refresher on road rules. In my city, a major road near the airport was re-surfaced and sidewalks were finally added. But, there was no funding available for bike lanes, or even a small shoulder for bikes. Instead, the city decided to install these signs and display them every mile along the road, reminding drivers that because there’s no shoulder, bicyclists can use the full lane, a law which has existed in Florida for as long as I’ve been a driver.
However, I happened to overhear numerous confused coworkers in the cafeteria at lunch, unaware of the rules of the road. “Yeah, it’s new. Bikes can take up the entire lane now. It’s only where the signs are posted though. Yeah, I know, it’s crazy, bikes are so dangerous!” When I inform coworkers that this is nothing new, I generally get looks ranging from skeptical to confused.
This isn’t exactly surprising. Most people take their driving test when they are teenagers and never have refreshers again. No wonder so many drivers don't know the law. You can prove this to yourself whenever you see someone come to a complete stop at a flashing yellow light. Watch the person behind him go on to do the same thing, because they figure “this guy must know what he's doing”. Indeed, most drivers simply follow the lead set by those in front of them.
Your Car Makes You Miserable
It doesn’t have to be a car accident or fatality for cars to lower your quality of life. For example: A few years ago, my wife did her college internship here on the space coast of Florida. She didn’t have a car (or even a driver's license), so she rented at an extended stay hotel within walking distance of her work. On some days, she would try to cross a busy arterial road to get to her favorite lunch spot.
This road had crosswalks, complete with walk signs and pavement markings, yet some days she actually could not cross the street. With the walk sign on for her to cross, cars would continue to flow through the intersection making right turns without stopping. When she would eventually force herself into the intersection, she would receive a barrage of continuous honking and profanity, even though the white walk signal was on. Cars would begin trying to maneuver around her on both sides. It only took a few attempts for her to realize that this was not a street that could safely be crossed by a pedestrian, and retreated back to the work cafeteria.
It wasn’t always like this. One hundred years ago, most cities were designed around actual humans. Roads were shared by pedestrians, horses & carriages, and streetcars. Most neighborhoods could be navigated on foot, as there were no parking lots or highways to get in the way. Until cars became mainstream, pedestrians always had the right of way. This lasted until the automobile industry created a public shaming campaign to take rights away from pedestrians and give them to cars. The ‘jay’ in jaywalking was a derogatory word in the 1920s synonymous with ‘rube’, or ‘country bumpkin’.
The auto industry's propaganda campaign was quite successful, and soon it became illegal for pedestrians to cross the street in undesignated areas. Once more and more cars filled the roads, the idea of the streetcar vanished. The third episode of the first season of TruTV's series “Adam Ruins Everything” titled “Adam Ruins Cars” does a great job of telling this story. If you haven’t watched it, I highly recommend it. Just listen to this quote:
“Today, Jaywalking is a crime. In fact, most of our modern traffic safety culture descends from this type of blame shifting propaganda. Think about it: a group of private businessmen coined an offensive slur to promote their product, and it worked so well that today it’s a legal term.”
Parking Lot Oceans
Once the new norm became every family having their own vehicle, city designs changed to incorporate larger and larger parking lots, creating more distance between shops and residences, making it more difficult for pedestrians to navigate cities on foot. Today, parking lots take up over 1/4 of all available land in many cities.
Cars have ruined our cities and neighborhood design, and MMM recently wrote this great article on the subject. The space consumed by three large adjacent stores and their parking lots would have been room for dozens of walkable homes, businesses, and green space in traditional neighborhood design.
The more parking we build, the more we dis-incentivize carpooling, and the larger the percentage of our tax dollars goes to maintaining these parking lot oceans. In 2014, 76% of drivers reported their primary method of traveling to work as driving, alone, in their own car. Our cities are literally going broke so that driving a five-seater car by yourself and having ample free parking can be normal.
So Close… But So Far Away
Today, in the United States, unless you live in a pedestrian focused downtown area, businesses and residences can be so spread apart that it’s difficult to walk to anything. In the past decades, things have been getting even worse.
Let me give you a few examples:
A friend lives less than 1200 feet away from his local library. Unless he can jump the canal or hop peoples' back yard fences, he has to travel over 3 miles to get there.
If one of my in-laws wants to visit the other side of the town 200 feet away, they need to either swim, or travel 6 miles. If this doesn’t discourage walking, nothing does! Clearly, this town was designed for machines, not humans.
It’s not just canals or sprawling suburban housing developments that impede walking, either. Highways that split towns in half have been built to alleviate inevitable traffic, but due to induced demand they are insufficient in alleviating traffic nearly as soon as they are constructed. Basically, no matter how many lanes you add (supply), they will still fill with traffic (demand). Widening our roads only incentivizes more driving and makes this unsustainable problem worse.
As MMM has pointed out numerous times, while cars are good at traveling hundreds of miles across countryside, they are TERRIBLE at moving you within a city. You can see this for yourself every time you have a line of cars waiting to park in a parking lot, or lined up in front of an airport or school. You can see it as you are waiting in traffic and bicyclists ride past you with ease.
These changes over time to our cities have made us less happy. We walk and bike less. We interact with our neighbors less. We put up with traffic noise and exhaust fumes everywhere we go, and pretend it's normal. Our quality of life has slowly deteriorated away as we continue to cater to automobiles. These two-ton metal beasts aren’t even fast within the city. According to this great interactive map, if you live in the greater DC area, you average only 19 mph on your hour long commutes. Denver isn’t much better, at only 22 mph. Plug in your city and see how you do. Hope you didn’t spring for the supercharged six cylinder sport upgrade!
Cars are so… Huggable?
You get it. Cars are a big problem we need to solve, particularly here in the states. But it’s an aggregate problem, not necessarily an individual problem. Within the next year or two, I will have solved it for my family by designing a lifestyle that isn’t car-centric. You can do the same. You no longer need to give up your cash or safety for cars.
You don’t need to wait for autonomous cars to solve the problem, either (though they will be very cool). We can ALL re-design our lives in such a way that we aren’t as dependent on cars. It’s not an easy thing to do, as cars are still the default in American neighborhood design, but just because it isn’t easy doesn’t mean it isn’t worth it. That’s one of the core principles of Mustachianism! As more and more of us change our driving habits over time, our cities will begin to change.
It's still a challenge, however. The automobile industry is a bedrock of American culture. It’s part of the American ‘DNA’, so to speak. And marketing makes things even worse. Did you know it is now perfectly normal to hug your truck? Check out this recent commercial from Chevy for an example of the ridiculousness of current car marketing campaigns:
Yup. Dude hugged (and kissed!) a truck. While I laugh and see right through commercials like this, the majority of us still don’t. The ideas behind these commercials stew in the subconscious, and before you know it, you want a brand new shiny giant white Silverado special edition. You visit the dealer and wonder why you feel a slight urge to hug a truck.
Is hugging cars really that strange? We already treat them as our mechanical overlords. We give these false idols the majority of our time and money, and design our entire lives around them. I suppose it makes sense at this point we would hug them too.
What I want is for more of us to see cars for the nuisance they have actually become. As creatures of habit, we humans sometimes need to be broken out of a routine to see the forest for the trees. When stuck in a routine all sorts of weird things begin to seem normal. Smoking. Slavery. Stockholm syndrome. You get the idea. Anything can become normalized given enough time, to the point where you don't even think about it anymore. I want you to think about it. Our current car situation is not normal. Or sustainable.
When enough people who understand these concepts take on roles of decision making in our communities, we can create real change. Don’t for a moment think “this is just the way things are, so this is how they'll always be… it’s too hard to change everyone’s mind.” Steve Jobs clears up this misconception perfectly, in what may possibly be the best forty-five seconds on all of YouTube:
“When you grow up you tend to get told that the world is the way it is and your life is just to live your life inside the world. Try not to bash into the walls too much. Try to have a nice family life, have fun, save a little money. That's a very limited life. Life can be much broader once you discover one simple fact. And that is: Everything around you that you call life was made up by people that were no smarter than you. And you can change it, you can influence it … Once you learn that, you'll never be the same again.”
Elon Musk exercised this same philosophy when people told him you can't reuse rockets- NASA would already be doing that if it were possible. Two years ago that statement was still true.
FI/RE To The Rescue!
Why am I sharing this with the financial independence community? Because we tend to be a passionate group of thinkers who have already begun “waking up” from consumerism. We have the ability to see the world around us from a different perspective than the marketed masses. Financial Independence also gives us the free time to contribute to our communities and get more involved with local government, the same way Pete has been doing lately.
— Mr. Money Mustache (@mrmoneymustache) March 9, 2017
I look at how much our FI community has grown over the past few years and I am filled with hope and inspiration. I think the time has come to stop glamorizing car culture and car manufacturers. We need to realize cars make us less happy and end up controlling our lives. And we can all do something about it. A relevant gem from that same Adam Ruins Everything episode:
“What really kills me about all of this is the only reason we’re stuck with this cluster fudge is because we were tricked into building roads instead of subways 100 years ago! The dominance of the car is a massive cultural mistake.”
So what can you do to help? Stop driving so damn much! This has been a central pillar of Mr Money Mustache since the beginning. Figure out how to gradually transform your lifestyle into one that doesn’t depend on cars. It’s OK if you do it in stages, and it’s OK if it takes a few years to make it happen. Cars are a triple threat: they simultaneously drain your wallet, deteriorate your health, and diminish your happiness. Walking or bike riding, on the other hand, does the exact opposite.
When you absolutely have to drive, slow down to save money on gasoline. On the highway, get into the far right lane, set the cruise control a few miles per hour under the speed limit, and let people pass you by. Try it once! My wife tested this out a few years back when she realized the low fuel light was on during a long stretch of highway with no exits for over thirty miles. When I looked at the driving statistics from her trip log, I realized this simple change in driving style saved over 30% more fuel than she used on previous trips, and had the fringe benefit of reducing stress during the drive!
Need more ideas? Here's just a few, you can probably think of more:
- Walk and use public transportation more often
- Buy smaller, older used cars
- Test out your city’s bus or rail system, if you have one
- Stop congratulating friends on their fancy new car purchases
- Support initiatives in New Urbansim and TND
- Stop driving for every little task or errand
- Plan and consolidate your trips into weekly or monthly outings
- Carpool more!
- Become a one car household
- Move to cities that embrace walkability
- Move closer to where you work
- Change the rules in your community
- Support reducing or removing parking minimums
Finally, realize that under no circumstances are hour long car commutes essential. You have the power to design your lifestyle in a way where you rarely need a car at all! And you don’t need to move to Manhattan to do it. For those who insist that car costs are essential- how did we, as a species, ever get by before cars? We walked. We ran. We used our bodies. The cost for this is food, so our food costs are essential. But car costs? Think again.
Cars Done Right: UF Example
When I moved to Gainesville to attend the University of Florida, I didn’t have a car, and I was in good company. The demand for the university had become so great over the years that the number of students far exceeded the parking capacity of the tiny one square mile campus. Rather than build additional parking garages, however, the university did something different. They took away the ability for undergraduates to park directly on campus or in dorms. Instead, freshman trying to park their cars were offered expensive parking decals that only allowed for parking a mile or two off campus. Bus service was provided to bring students to and from campus.
Within a few years the car culture at the university changed. Very few undergrads had cars. The Alachua county bus system became one of the most exceptional bus systems I’ve ever ridden, with buses arriving literally every five minutes with continued service running well past two in the morning. The school grounds became more beautiful, with very few cars having access to the main campus. Old on-campus roads were shut down and converted to green space and pedestrian paths.
I loved my college experience in Gainesville for a number of reasons, but looking back I realize the thing I miss most is that walkable lifestyle. I would walk five miles every day across a beautiful campus with almost no road noise or car fumes. It sounds counter intuitive, but all the crazy parking restrictions and ridiculously expensive parking decals actually made the city much more friendly to pedestrians! In general, the harder we make things for cars, the happier humans become.
This is quite the opposite of what most cities do. The city I live in now is about to spend $50+ million adding a third lane to an arterial road that passes right by my house. Imagine what else we could use the $50+ million dollars for?
When you take space away from cars and give it back to the people, you end up with great places to walk. This increased foot traffic turns out to have a very positive effect on businesses. Turns out shoppers are more likely to pursue your store when they walk by on a casual evening stroll then they are when they are flung by at 50 miles per hour in a steel cage. Who knew? As neighborhoods gradually become more walkable, improved public transportation and a snowball of other benefits usually follow suit.
Although I just moved into my current house less than a year ago, I already want to move again. This time I’ve got my eyes on a small neighborhood within a few hundred feet of two public schools, two public parks, and a public library. It’s only about a mile north from where I currently live, so my friends think I’m crazy to go through the hassle of a move for something so small. But to me, to be able to walk out of the house and walk to the park or library in less than five minutes is something wonderful. Throw in a grocery store within biking distance and you have everything you need to avoid driving most days of the week.
In the future, cars will be fully autonomous, and there will no longer be a use for all the parking lots that litter our cities.
This can become a wonderful opportunity to accelerate the transformation of our neighborhoods back to pedestrian focused communities with tons of green space and natural beauty. Communities that encourage residents to come out from behind their metal cages and actually get to know their neighbors. What a novel idea.
*Update 12/30/17: The folks over at Transporation Evolved have created an excellent cost of commuting calculator that I've embedded below. I highly recommend you check out their related article here!
Calculator Created by TransportationEvolved
Interested in starting your own Financial 180? You've come to the right place. The math is easy: create a gap between what you earn, and what you spend. If you can save half your income, your working career will only be around a decade long! Want to shorten it even more? Read on to see exactly what expenses the wife and I cut from month to month. Track your progress against the milestones of FI, and gradually build up your own savings snowball. Check out the books and links in our resources section and jump-start your journey to FI. The you ten years from now will be glad you did! Ready? Start here.