Lady Kit and I sold our house (article still to be written) in January 2018 and I relocated Monterey, CA where she has been living for two years. As part of this transition I took a new job with a $30,000 pay cut.
As I mentioned in that article, my commute is about three hours roundtrip. What this means is I spend a LOT on fuel.
My First Car
I bought my first car after I graduated college a week before I moved 500 miles to start my first “real” job. As you might imagine, I got a fun car (in this case a Subaru WRX) and got a not so good deal since I was in a hurry.
Well, the car has been paid off for a few years now and I have racked up 170,000 miles in 9 years. I am now considering a new vehicle for a few reasons.
I get about 28 mpg on the highway driving to and from work, not too bad for a sports car, but not great for how far my commute is.
Why I Am Looking At A New Car
The repairs just keep coming. I had a new clutch installed when I got back to California, the throwout bearing was pretty much dust by the time I rolled into the dealership in SoCal (stop and go traffic in Denver did not help, thanks MMM). At this rate I am driving I’ll be due for new brakes and timing belt sometime next year. So I am thinking the car is probably going to cost $2,000 a year in maintenance.
California emissions requirements have become stricter, requiring only OEM parts even if the car will meet pollution level requirements with aftermarket parts.
We have spent $3,174.03 on fuel (and most of this is mine, Lady Kit’s commute is much shorter) so far this year.
We have spent $1,918.46 on car maintenance this year (30,000 mile service, smog repairs, new tires, registration, oil changes, and a car wash) so far this year.
That means we’re on track to spend $10,184.98 for the year in car costs. Some people’s entire expenses are less than that.
Electric Vehicle Analysis
So I decided to do some math. The FIRE community loves their used vehicles. I personally hate them. I have had two used vehicles and I got some decent life out of them, but I have more confidence in a vehicle that I know the complete history of. We’re also looking at a different kind of vehicle.
We’re jumping on the band wagon and going for an electric vehicle. We looked at the BMW i3, Chevy Bolt, Kia Soul EV, Nissan Leaf, and Tesla Model 3.
The BMW and Kia are have ranges that are just a little too short to make me comfortable. The Tesla model S is the only one that I could find pricing for originally, but I was able to find the Model 3 now, but it’s going to be $45,000 to start (the cheaper version won’t be available for at least another year).
The Bolt is a possibility, but the math works out the best on the Leaf. The range is shorter on the Leaf, but it gives us plenty of buffer for our commute situation.
My actual spreadsheet is here in case anyone wants to see how I did the numbers.
Assumptions
Our new commute from a new house and Lady Kit’s new job will bring us to about 450 miles per week (I included a bit of buffer in here to account for miscellaneous errands and trips). I’m assuming fuel will be at least $4.25 a gallon (the WRX requires 91 octane and we live in CA). Finally, I assume the WRX will require on average $2,000 a year in maintenance going forward.
I figure I can still get about $5,000 on my 9-year-old 4-door grocery getter and we don’t have a need for a third car, so I will either sell my WRX private party or trade it in.
Being in California there are lots of incentives for electric vehicles.
- Federal Tax Credit – $7,500
- State Tax Rebate – $2,500
- County Rebate – $1,500
- Power Company credit towards charging station – $500
- Significantly Lower Electricity Costs – $0.12503/kWh vs. $0.23/kWh
- Free parking at work (normally $100/month)
- Use of HOV (carpool) lanes
Based on all this I assume I can get a new Leaf out the door for $17,500 and $12,500 after including the sale of my current car. This means we’ll break even in just about two years.
After five years we’ll have saved $18,500 or enough to max out a 401k for a year.
The next step now is to make this deal happen.
