Living in NYC can be expensive if you let it. Food can be expensive. Housing can be expensive. Entertainment can be expensive. So, as people in the city, it’s even more important that we are conscious about our purchasing decisions and buy based on our priorities. However, there is one area where we spend less than everywhere else. It’s our competitive advantage for taking control of our finances in NYC.
We don’t need cars!
It’s an unbelievable advantage and really the only reason many of us can afford to live here. It’s time to look at some numbers and appreciate the advantage we have, while at the same time, understanding that you should NEVER EVER EVER get a car here.
Average Car Cost in The US: $9,000/year
According to a recent AAA study, the cost of car ownership is $9,000 per year – That includes the cost of maintenance, fuel, tires, insurance and depreciation.
What A NYC Resident Might Pay for a Car: $14,350/year (or more!)
Add in a parking spot at a very reasonable $300/month. Insurance rates change depending on what borough you live in, but it will be at least $1,500/year ABOVE the national average. Gas costs almost 50 cents more per gallon, so expect to pay at least $250 more per year on gas. I’m unable to find suitable numbers to compare the price of tires and maintenance, so I’ll stop there, but this number could be even higher!
What We Actually Pay for Transportation: $1,356
That’s right! We win this round! And by a large margin. And just think of people that own multiple cars and buy them on payment plans where they have to pay interest as well. We have it good. Hell, even if you goof up and get a cab a few times a year, you are still coming out ahead of car owners. Using the 173 multiplier, the $637 you are saving each month by being a NYC subway rider instead of a car owner will amount to $110,201 in 10 years if you invest it. Imagine what it will do in 30 years (ok, I’ll tell you – it will be over $865k!)
Amazing right? Make sure to take advantage of this competitive advantage, because there is a flip side. If you do give in to the temptation of owning a car in New York, it can cost you dearly. Due to the increased costs of car ownership here, you would lose out on a potential $187,330 after 10 years of investing and over $1.4 MILLION over the course of 30 years of investing. Wow!
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