Can going down to one vehicle be a savings strategy?

You’ve both logged off at work for the last time – no more driving to work, getting stuck in traffic, paying for parking passes, and fueling up all the time!

But now that you’re on a lower retirement income, can your household afford to have more than one vehicle on the road? Save with SPP took a look around to figure out the pros and cons of going down to one vehicle.

The Money Crashers blog notes that the cost of running two cars, “based on 2019 calculations from AAA (in the U.S.)… could be anywhere from $12,120 to $25,114 per year.”

Could you save by going to one car, the article asks. “The answer to that question is a definite maybe,” Money Crashers reports.

First, the article explains, you’ll get some cash by giving up your second car.

As well, getting rid of an extra vehicle “allows you to reap ongoing savings year after year. The exact amount varies based on what car you have and how much you use it,” the article continues.

How much you’ll save depends on how much the second car is costing you, the article notes.

If there is a loan to pay off for the car you’re selling, you might not see as much money in your pocket from selling the vehicle. However, even so, paying off the loan could save you around $500 per month or $6,000 per year, the article explains.

Other savings – which depend on your individual circumstances – include fuel, insurance and maintenance. You will also save on registration and licence costs, the article notes.

Throw in tolls and parking and the savings can truly add up.

There can also be a downside, the article concludes.

“Giving up a car can also create new costs. You need another way to get around, and in some cases, that could mean using your remaining car more,” the article notes. You might be able to offset that through carpooling, using public transit, walking, or biking, the article adds.

The Arner Adventures blog offers up some more thoughts on the topic.

“Becoming a one-car household can be less overwhelming than you think. If you have always had your own car and are not sharing one, you may feel a sense of loss or a lack of independence,” the blog begins.

“Fear not. You truly can live without a second vehicle. Most Americans own only one car. Only 33 per cent of car owners own two vehicles,” the blog notes.

The blog authors then list their reasons for going to one car – “having two cars increased our carbon footprint,” they write. Going to one vehicle thus had environmental benefits.

“We figured we would save money significantly on auto insurance, maintenance, fuel, and auto issues as they arise. The average amount we would save a year is roughly $2,000 per year. We do not have car payments, so if you do, then add those to your savings. The relief of not having a car loan could be its own category,” the authors report.

They also say they have had “more adventures” by going to one car. Say what? Let’s read on.

“By exploring alternative transportation, we found that the Amtrak railway system is an option for us. When thinking about upcoming plans to travel, we know that we can cut our travel costs by utilizing the train system. How fun is a train ride?! It’s an adventure, we will tell you that,” the blog enthuses.

It’s an interesting topic. For sure you have to cooperate more with your partner on who needs the car to go where, and when. But the money you save can really add up.

And a nice place to stash that extra cash could be your retirement savings account.

If you lack a workplace retirement plan, and are trying to save for your retirement on your own, a great partner can be found via the Saskatchewan Pension Plan. SPP is open to any Canadian with unused registered retirement savings plan room. You can contribute any amount each year, up to your RRSP limit.

As well, you can transfer in any amount from other RRSPs you might have.

SPP then takes on the hard part – investing your precious savings dollars in our low-cost, professionally managed pooled fund. At retirement, SPP helps you turn those savings into retirement income, via such options as our lifetime monthly annuity offerings or the more flexible Variable Benefit.

Check out SPP today!

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