Land Icebergs

Many people know the deal with icebergs thanks to events such as the Titanic or even The Titanic (which no doubt informed a handful of movie-goers who had no clue it was real).

Many more people have probably seen a picture like this at some point in their life:

iceberg

Icebergs are crazy cool and crazy big. They look innocent enough, but when you see the full picture, it’s far from innocent.

Cars are pretty similar.

You see a new car with a sticker that says $30,000 for example (that’s the average price of a new car). It’s a decent amount of money for sure, but there’s lots of things screaming in your face telling you not to worry. There’s the chance of negotiating on price, making car payments, warranties, and 0% interest.

Used cars are significantly cheaper than new cars, but they’re still no small chunk of change. The average price for a used car is $8,495 as of September 2012.

That’s all fine and good, but it’s not really the part that gets you.

From year-to-year, owning a car is expensive. According to this AAA report, the cost of owning an average sized sedan per year is about $9,000. SUVs top the price list, coming in at $11,360 while a small sedan does the best, costing $6,735 a year.

Say you buy a new car and keep it for 10 years. Keeping in mind that a new car costs $30,000 to buy and $9,000 a year to own:

New Car Cost

Likewise, buy a used car and the story is similar (albeit slightly cheaper on the front end):

Used Car Cost

In the end, all the costs under the surface add up to make a picture similar to that of the iceberg. Note that while some of these costs are strictly monetary (new tires, gas, oil change, registration, insurance), some have costs on our mind (more stuff to think about).

Car Iceberg

Make sure your car doesn’t sink your ship.

-Adam Conway

Advertisements

3 thoughts on “Land Icebergs

  1. Yes this is spot on. Before I grew a brain (late teens to late 20s) I was a card carrying member of the car centric crowd. Then strangely, I bought a bicycle. And as time went by I drove my car less and less and my bike more and more. The more I rode the more I want to ride and I sold my car 8 years ago. Now I don’t see any need for me to have a car. I can go anywhere in my town on my bike in 30 min. At a cost of 0$. Own a car? I don’y think so. 2 wheels good 4 wheels BAD.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s