Should You Become a One-Car Household in Retirement?
To make the most of their fixed income, many couples choose to downsize in retirement. This often can include consolidating from two or more vehicles down to one.
According to the Bureau of Transportation Statistics, the cost to own and operate a vehicle can add up to almost $9,000 a year on average for every 15,000 miles traveled. Once you retire, paying that much for two cars may fall outside of your budget. If you’re thinking about becoming a one-car household, here are some things to consider.
Type of Vehicle
When deciding whether to become a one-car family, how do you figure out which vehicle to keep? That can depend on a number of factors, including:
- Family Trips: If your family is nearby or you plan to spend time driving around grandkids, you may want to keep the vehicle with the most space. The American Grandparents Association (AGA) says a minivan or crossover might be the ideal choice because those offer space for toys and diaper bags, plus easy car-seat loading. The AGA also recommends factoring in safety, as picking the vehicle with the higher crash-test rating can help protect your precious cargo.
- Weather: According to the Federal Highway Administration, 23 percent of accidents each year are due to adverse weather conditions, such as rain, snow, sleet or extreme wind. Picking a car that works best in your climate is important for your safety and comfort. According to Edmunds.com, vehicles with features such as all-wheel drive, heated seats, a remote starter, winter tires and heated mirrors can be helpful for those who deal with cold weather and snow, ice or rain. Consider sticking with a vehicle that can handle whatever weather conditions come your way.
- Expenses: Obviously, you may want to choose to keep the vehicle that brings the fewest extra expenses. If one car is paid off, it might be better to stick with that one and get rid of your monthly car payments. Before making a final decision, also compare fuel, maintenance, and insurance expenses, as well as depreciation, which Consumer Reports notes all contribute to cost of ownership.
Other Transportation Options
If you live in an area with a public transit system, you may be able to utilize buses, shuttles or subways when your spouse needs your shared vehicle. Forbes says taking public transportation for your normal daily activities can offer major savings over owning that second car.
You and your spouse are likely looking forward to exploring new hobbies together — and apart — in retirement. Since your schedules will be more flexible, Next Avenue says you may not need a second car – you just have to align your schedules. After all, you probably remember the days of carpooling, multiple school schedules and extra-curricular activities. If you’ll be sharing a vehicle in retirement, you’ll be no stranger to coordinating transportation for you and your spouse’s individual commitments.
If you’re thinking about downsizing to one vehicle in retirement, consider these factors before making your decision. Reducing to one car may help you save money in retirement, but it’s important to make sure you figure out what will work best for your household.