Out of Control Transportation Costs

In 2011, my transportation costs consisted only of the expense of gas. I didn't pay for insurance, as I was driving my dad’s car. He owned the car, so there were no payments required on it. My dad has always been into repairing his own vehicles, so every time something would go wrong with the car, he would fix it himself (or rely on my boyfriend and I to fix it).

My transportation costs stayed around $200/month, which was gas and only gas.

When that car officially died in January, I bought my Honda. Since I was driving my own car, I have to pay for insurance as well.

This freed me completely financially; I do not owe anyone and I am accountable only to myself. The only downside is the cost.

In 2009, I got into a fender bender in my previous car because I didn’t shoulder check and cut somebody off, resulting in the car hitting me from the side. The accident was my fault and it caved in the wheel well of the other car. Apparently this is an extremely expensive repair, because I ended up being presented with two options: I could either pay it out at $4,000 or “enjoy” a nice 10 percent surcharge on my insurance premium. I would have had to take out a loan to pay it out, so I chose the surcharge with the plan to not drive for the next couple of years. I chose the surcharge. The insurance on my Honda is $4,000/year.

My saving grace was that I lived fairly close to work for a few months, saving me a lot on gas, so my monthly fuel expenses went down by quite a bit.

When I got my current job in April, I started working farther from home, costing me more in gas. On top of that, they are building a new bridge that I have to cross every day to get to work. The government is tolling the bridge at an astronomical $3.50 per pass ($7/day if you go to work and then come back home), to help pay for the bridge. The tolling starts in December.

So what we’re looking at, then, is the following:

$220 Car Payment
$220 Gas
$330 Insurance
$140 Bridge Tolls
$25 Parking (I have to pay every once in awhile)
$20 Maintenance (pro-rated over the months)

________________________________________
$995 Per Month

That figure is absolutely astounding. It’s double my portion of the rent, and more than our monthly rent as a whole. It’s actually almost half of my monthly income from my day job.

Seeing that figure is extremely motivating for me to get out of debt and pay off my car loan as soon as possible. Paying off my car loan will reduce that expense to $775.

It will also make me feel a lot more comfortable buying a house, which would decrease the bridge toll cost and the gas costs; we are planning to buy closer to work so we don’t have to go over the bridge. I could probably save $100 on gas when we move, and the bridge toll expense would be nonexistent. $515 is much more manageable than $995.

But, the first step is to tackle this car loan like it’s my job.

I’ve been able to pay off $2600 in under 6 months, and for a big portion of those months, I was making half of what I’m now making.

With a trip to NYC in September, I don’t think I’ll be able to put a lump sum onto my loan until October. But having this debt payment every month, hanging over my head, is starting to get pretty depressing. So here’s what I’m planning to do to cut back:

  • Never pay for parking unless necessary (Savings - $25/month)
  • Eat at home/brown bag it for breakfast and lunch every day, and dinner 6 days per week (Savings – $40/month)
  • Find a way to save $20 on my phone bill (Savings - $20/month)
  • Stop buying books; read the ones I have (Savings - $20/month)

And then, now that I’ve handed in my final project, I have some extra time with which to make extra money. Here’s the plan with that:

  • Put all extra money made from babysitting toward car loan (earned – about $250/month)
  • Find an extra $100 per month through side gigs (earned - $100/month)
  • Continue to put blogging income toward other savings/travel – otherwise I wouldn’t be able to pay for my trips in September (N/A)

This can all be implemented at the start of August, but the income part will have to go toward my September endeavors for that month. So, by the end of the year if I keep this up, I’ll be looking at:

$220/month payment, $40 going to interest = $180/month reduction
$105/month found via cutting back
$350/month earned at side gigs
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=$675 extra payment each month

My current loan stands at $9850. By January 1, 2013, I should be able to have my loan decreased to $6,970.

The loan was supposed to be a five year loan, but I should have it gone by the end of 2013.

This is a relief – it’s much more manageable than paying it down for five years. And this is also not accounting for any extra payments that I will be making from my regular income, though I will likely have to save that for the crazy insurance expense that I have to deal with.

Are your transportation costs out of control?

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63 thoughts on “Out of Control Transportation Costs

  1. Right now for my car, I only pay car insurance and gas (since my car is paid off). And HOLY CRAP I would have a heart attack if I paid that much in insurance.

    I pay less than $300 every 6 months for car insurance, and the boy just bought a brand new Jeep and pays $75 a month.

    1. HOLY CRAP is what I thought about the insurance payment too. That's double what I pay for car insurance and 4 properties. Daisy, maybe you should look into public transportation until you're a bit older and the insurance cost come down....

  2. $995 a month is quite expensive! Can't you take a longer route and drive around the bridge, or take public transportation to work?

    Also, have you shopped around for insurance, you may be able to get it cheaper. Check out http://www.kanetix.ca

    Another way to keep on reading books that you like is to get them for free at the library.

  3. Ouch! That's some pricey insurance.
    No chance you can take transit, eh? If you could park your car for two months you'd save a ton of money! The skytrain is close to that bridge...
    Perhaps move to East Van, seeing as you're already used to the ghetto 😉 Have you checked out any of the carpooling sites? That could be a way to earn a few more bucks, too.
    I doubt you'd save on insurance, as CMWYWEC suggested, based on my guess of your age and knowing that you live in BC, because your base premiums will likely still be inflated on the ICBC portion.

  4. I hadn't been paying attention to the bridges, but tolling that one will massively reduce congestion because currently (I hear) lots of people use it, instead of Golden Ears, but once it costs money the incentive will be gone. So that decision should be good for recovering the costs of infrastructure construction.

  5. Woah! Man, I don't envy you. That's more than I used to pay in rent! My transportation costs have gone up times a bazillion since i bought my car, obviously, but they're still pretty reasonable. Car payment is $180, gas is about $100-$120, unless I'm going on a trip, and then I probably spend another $50 on smaller items like parking, transit tokens and train passes (I still take the train into the city pretty often, rather than driving.) My insurance is $130 a month (living in the suburbs is AWESOME for this), but I prepaid it for the year, so it's not part of my monthly budget.

    It's definitely more than I WANT to be paying, but it's OK for now. Though my gas costs will probably double, at least, in September when I go back to school and am commuting a 150 km round trip four days a week. *cries*

    1. Post author

      It's double what I pay in rent 🙂 It's outrageous! Gas is so expensive - it used to be that gas wasn't all that expensive so it didn't make a difference, but now ..ugh.

  6. Continuing my essay: if it's any consolation, my car payment is pretty much equal to your transportation costs. However, that was by choice, as the money was nearly free, so we chose to finance, but over a short time period.

  7. OmG! That's is crazy! I haven't calculated our transportation costs, but our insurance for both of us is $230. We have a car payment for my hubby's car, which is a min $150, but we are putting extra on it (min $300). Gas is a high expense. I only fill up once every two weeks because I live 5 minutes from work. So that's $33 every two weeks. My hubby fills up 2X a week ($35*2).
    I, also, want the car payment gone. I am hoping we can pay it off by next August 2013.

  8. Laura

    WOW your car insurance is super high! Is that common? For me and my husband we spend about $500 in gas (he drives a lot for his job), $150 a month on car payments for my car (his is paid off..mine will be paid off by the time our baby comes in November), and about $90 on full coverage insurance for BOTH of us. Added up, we spend about $740 on two cars each month. Maintenance on our cars is pretty low since they are fairly new cars (2006 & 2007)--probably averages out to about $40 a month or so.

  9. Brian

    Does your insurance include GAP coverage? If it does, when you get the car paid off, your rate should also drop since you won't need that (you might have to call to get it taken off).

    My costs are around $250/month for gas and we pay $150ish/month for both cars insurance. My wife probably spends about the same on gas so total household is

    $650ish for two cars, one motorcycle and some gas for transportation cost. Not great, but not horrible.

  10. I just had to renew the registration on our car which cost us about $70 and the back brakes need to be replaced and we need to buy the stuff for an oil change. So right now, we're looking at higher than average costs for our transportation but normally we spend about $250 a month (if that).

    Good luck on paying your car loan down Daisy! And how long will the 10% surcharge be on your car insurance? Will it go down after the repair is paid?

  11. Emily @ evolvingPF

    Those costs are absolutely insane. You spend in three months what we spend on our car in an entire year. And I don't think the main problem is your car payment, it's the insurance. Are you completely sure you have the best rate possible? You're spending in ONE month practically our whole six-month cost and that's for two drivers.

    I know you've said before that public transport isn't an option in your city, but... really? Have you tried it out to make sure you don't like it? How about carpooling now that the toll is in place? I bet a lot more people would be interested now!

    This car is killing you!

  12. Holy crap! $4000/year for car insurance is insane. I think they are ripping you off. Have you tried shopping around at all to see if you can get a lower rate?

    I'm not sure how much we spend on transportation each month because it varies so much with gas prices. Summer months are more expensive with driving to motocross races with a vehicle that gets 12mpg. I car pool for $50/month which saves the miles on my car, which will make it last longer. Both of our vehicles are paid off so no payments. Between Insurance and gas I think our monthly average is around $450-$500 for transportation.

  13. When I was commuting for work, I paid close to that. My car was paid off, but my gas costs me around $700 a month and insurance was/is $350 or so.

    I hated that feeling of knowing that a good chunk of my paycheck paid for me to just get to work.

    Also, i didnt know there were tolls in BC. Odd

  14. When I was commuting for work, I paid close to that. My car was paid off, but my gas costs me around $700 a month and insurance was/is $350 or so.

    I hated that feeling of knowing that a good chunk of my paycheck paid for me to just get to work.

    Also, I didn't know there were tolls in BC. Odd

  15. OMG Daisy how do you afford that? Last time I was in Canada, we drove the entire time one empty and filled up the car as soon as we got back to Washington. Gas is insane, your insurance is out of control -- hopefully you can shop around?

  16. That insurance amount is seriously outrageous, Daisy. Hopefully you will hit an age soon where you start to get the "adult drive" benefits.

    Also, you could probably get married to lower your rates...:)

    1. Post author

      I don't think we get lower rates in Canada when we get married! I've hit the "adult drive" age but then the accident happens. When I pay that off, I'll go back down to 15% savings.

  17. You should inquire to see if you can raise your deductibles. If you have less than $1000 for collision and $500 for comprehensive insurance you are paying too much. Over the course of a few months you stash away the difference in an account so that if something happens you have the cash to pay the deductible. ICBC is pretty expensive. I just moved from AB to BC and we pay $2500 a year for two newer vehicles full coverage with a ten year clean driving record for both of us. The only other option might be to sell the car and buy something older with cash that you could decline collision coverage - that is the main area where you are paying for the nose. Good luck.

  18. That right there is why a lot of people get in trouble with money, most people look at the car payment as the cost of owning a car and that's it. My last car was in the $800 range. I paid less in gas and insurance, but more for the monthly payment. Currently my vehicle expenses are costing me about $200 a month: $50 for insurance, $110 for gas, $40 for misc. That will likely be changing soon, as I'm thinking about getting a different vehicle.

    On a different note, should the eating out savings be $40/week or $40/month? It just seems like a really low number.

  19. Wow cars are expensive in Canada. They are expensive here too but I pay about 1,000 a year for insurance as a young male in Florida... Congrats on making a plan to get it paid off though! Moving closet sounds like it will help out a ton and don't forget the time you will save too!

  20. Holy crap, dude! THat's INSANE!!! I can't believe how much you pay for insurance! Transportation shouldn't cost so much, no way! Man that sucks. But you've got a good attitude. Get that car loan paid off. And you got a Honda, which was a great move. Those cars don't ever get broke!

  21. Em

    For 2 cars the expense is:

    $175/month insurance
    $175/month gas
    $50/month maintenance estimated

    = $400/ month total. I would love to lower this cost by getting rid of one car since my husband lives less than a mile from his work but he sacrifices a lot in other areas financially and is very understanding when I limit our spending so I don't worry about the second car too much since they are both paid off and in great condition

    1. Post author

      That's pretty affordable, but I completely understand your desire to decrease your expenses. Especially when it could decrease them by hundreds of dollars - how couldn't you want to? But you're right, if your car is paid off and in good condition,t hen I guess there's not much point in getting rid of one.

  22. Wow, that car insurance premium is INSANE. My wife and I pay $72/month for full coverage one one car and liability on another.

    Our monthly car expenses are quite high though if I really sit down and think about it: $400 for gas, $72 for car insurance, $150 we save each month for car repairs, and $26 we save for car tags and taxes. So that's $648. We hope to save $200 on gas by moving closer to our jobs...hopefully that will come sooner rather than later.

  23. Simple Island Living

    That's insane! I can't believe what you're paying - the only time I came close to that was when I was paying off my car and forced myself to throw $550 to the car payment every month. Plus insurance ($100/month) and gas, I may have come close to what you're paying.

    Is public transit an option, or carpooling? Any way for your employer to help subsidize those transit costs?

  24. Holy schnikes! That's a huge chunk of money for transportation expense! Good to see you found ways to get it down. We're trying to pay our cars off more quickly than the duration of the loan as well.

  25. In Victoria for my 2002 Acura, we pay $850 / year.

    The insurance is high but that is common for many drivers.

    If you drive safely the next couple years, it should be reduced.

    BC = Bring Cash (to everyone in Canada).

  26. Have you looked into if the other bridge will save you the $7/day? Surely, taking that route can't cost you more than $7 in gas. I'm guessing a lot of people will be taking the other bridge. The government is hoping that the other bridge will be so congested that people will decide that $7 for the new bridge is better than waiting in traffic, though.

  27. Edward Antrobus

    Ouch! Why are the maintence costs so high? That works out to $240 per year!

    My wife and I pay $50/month for insurance, for the state minimum. We spend about $100-$150 a month on gas, and her car payment is ~$280/month (it's actually $140 biweekly, so some months there are three payments). Pro-rated maintence costs are under $10/month. So we are looking at under $500/month for most months.

    1. Post author

      I change my oil regularly to avoid even bigger disasters. Plus, air filters, spark plugs, even fluids.. it all adds up.

      1. Edward Antrobus

        Unless you do a lot of hard driving, air filters don't need to be replaced as often as they say. Plugs are a once a year deal that are actually pretty easy to do yourself. Oil changes too.

        1. Post author

          Yes, we do all of these things ourselves but we have to buy the parts and some of that money also goes toward tires (I need new tires; mine are terrible). Keep in mind that I do live in Canada, so oil, and pretty much everything else is substantially more expensive than in the states. Also, I drive quite a lot - 10 hours a week or so.

  28. $4K/yr for insurance? Even with an accident on your record that seems ridiculous. Does your Honda have a gold plated dashboard or something?

    Find an insurance agent that represents a bunch of companies and get quotes. We did and it cut our insurance costs by 30% to switch away from Progressive to a company we had never heard of. The agent said they were great and they have been. We even had an accident (not my fault - i was rear ended at a stop light), and so far all the med bills and car repairs have been completely covered with great customer service. Geico and Progressive and other internet based companies aren't always the cheapest or the best even though their commercials make it seem that way. We pay under $1400 every year to insure 2 cars, both with soft tops. Granted, we live in a low crime area, so probably don't pay too much additional for the soft tops because of that.

    How viable is a move to another zip code? If you're in a zip code that has a high theft or crime area (even if you're not living in it) that can jack your rates way up. Just a thought if you're already considering a move....

  29. Paying off your loan like it's your job is a solid plan. I wonder what your b/f's insurance discount or premium is. If it makes sense make perhaps he can get it insured under his name and you can pay him afterwards 🙂 . And that bridge toll is ridiculous 😕 I hope the city is going to put the money to proper use.

    1. Post author

      His is substantially cheaper, but I'd like to pay off the premium so that mine can go down. It will happen in a few years. Isn't it so dumb!? It makes me crazy thinking about the toll.

  30. I pay 600 euro/year insurance, around 600 eur/ year maintenance cost and 100 eur/month for the fuel. I go to work with city bus and I save monthly cost for fuel and also the maintenance costs. After reading the above amounts my amounts seems afordable.

  31. Four grand for insurance? Holy mackerel! That would reduce me to walking to work!!!

    If you're both having to pay commute costs like that, maybe you should consider moving closer to work; it might save enough to make in-town rent cost-effective. And if one of you lived close enough to work to use public transit, maybe you could become a one-car household. That alone would make it worth living in the city.

    In Canada, can you find an insurance broker rather than an agent? A broker deals with and is knowledgeable about a number of insurance companies, rather than representing just one. I thought I had a rock-bottom rate until I decided to ask a broker who's in my weekly business networking group -- he saved me $500 a year on car & homeowner's. And he got me better coverage.

    1. Post author

      I like a 40 minute drive to work - it would take a LONG time to walk (3-4 hours). We don't get insurance from a company, we're insured by an organization (almost everyone is)

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  33. HOLY CRAP! $4K? That's really high. O_O;
    I mean, I understand that you were in fender-bender... but eek!

    You might want to start saving a few dollars every week or month too to start a car fund... For oil changes, maintenance, new car tires, etc.

  34. Ouch man. That's crazy high insurance, and crazy tolling.

    My transports costs are usually $0 as I walk to work (and if I need to get out to events or meetings there are staff cars and taxis).

    However T drives to work and we drive around on weekends, obviously. It costs about $90 to fill up at $2plus a litre, and we usually fill up once a week.

    I hate to think what our insurance would be on a newer car - our 1998 costs over $1k for full cover.

  35. That's an extremely high insurance payment even with a fender bender. When I was 18 with a sports car, I paid only 75% of that. As a male, my insurance is even higher. I'd look for some savings there - I'm sure there are some to be found.

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  37. Eddie

    Those are some eye popping numbers.
    Is your car payment monthly? Amortized over what? Because it seems pretty low, unless you dropped a lot of cash upfront.

    Are insurance rates high in BC all around? The $330 per month is quite a bit or is that due to infractions?

    Sorry for all the questions, just curiosity got the better of me. 🙂

  38. I paid off my car a year or two ago and so I have had only insurance and gas. The Wife leases her so we have a $330/mo on that one.

    Paying off my car was an amazing feeling. If you are able to drop that payment if everything stays the same you basically gave yourself a $2,640/yr after tax RAISE. If you make 50K you just a 5% bonus.

  39. Wow! That's a crazy amount to spend on transportation. I have a bus pass ($81) and Brian pays for 2 packs of tickets a month ($45) plus we budget $200 for car sharing (though we don't usually use that much).

    Personally, I'd rather they toll a bridge or highway than ask the general populace to pay for it all through taxes. I'm actually surprised they got rid of the Coquihalla toll a few years back - that was a very well maintained highway. I would have liked to see them keep it, perhaps at a lower rate, just to get the road maintenance revenue.

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