On Good Friday Leila (my fiancee) and I were driving around Auckland randomly checking out different bits of the city (as you do when you’re an urban planner, it’s an unhealthy but interesting obsession) when my car simply stopped working as we were exiting from SH1 just near Manukau City. It was a rather strange sensation, as all of a sudden the car just stopped responding to what I wanted it to do – the engine didn’t cut dead (immediately) nor did the engine rev like crazy with the wheels going nowhere, it was just a rather low-key death.
So there we were, stuck relatively in the middle of nowhere. I’m not a member of the AA, because of their roads lobbying, and my State vehicle insurance very frustratingly didn’t cover “Roadside Rescue” because I only had 3rd Party insurance, because full insurance had originally been extremely expensive and my car isn’t worth an utterly huge amount of money. A $180 tow later we were back home in central Auckland, with the huge question of how much was this going to cost to fix hanging around my neck. Fortunately Leila’s parents lent us a vehicle over the last couple of weeks, for things like being able to see my daughter and get her to school, until I eventually got around to getting my vehicle fixed. Of course actually getting my car fixed entailed organising another tow from my place to the garage (although fortunately that was done by the garage itself), with the final bill for the fix-up being close to $700.
All of this rather expensive and inconvenient process has reinforced to me two things:
- That the “freedom” you supposedly get from having a car is exceedingly fragile, and you are extremely reliant on nothing going wrong with your vehicle for that “freedom” to remain.
- That the “freedom” of car ownership can be pretty damn expensive to maintain.
It’s interesting to explore that second issue, of how much we actually have to spend individually for this whole car-dominated society that we have to work. What comes to mind for me is an excellent passage from the book Suburban Nation: the rise of sprawl and the decline of the American dream by Andreas Duany and Elizabeth Plater-Zyberk, which talks about how the need for car ownership is having a huge effect on the ability of people to afford home ownership:
It has become increasingly difficult for the middle class to own satisfactory housing. In 1970, about 50 percent of all families could afford a median-priced home; by 1990, this number had dropped below 25 percent. There are many reasons behind this phenomenon, but the most significant factor is evident in the image on the left [shows a small house with four cars in the driveway]. In what has become a typical sight in suburbia, this family appears to own almost as many square-feet of vehicles as it does of housing. Since every single adult in the household must drive a car in order to function, this situation is unavoidable. The impact it has on housing affordability is profound.
According to the American Automobile Association, the average cost of owning a Ford Escort – one of the cheapest cars available – is over $6,000 a year. At conventional mortgage rates, that figure translates into more than $60,000 in home-purchasing power. In other words, two cars will pay for a starter home…
…This is not just a theory. The banks that qualify mortgages are well aware of the burden that cars can present to homeownership. When qualifying a loan, bankers calculate the “back ratio”, which reduces income by the borrower’s existing debt, often primarily automotive. Bankers have been known to tell borrowers to sell their car, which the borrowers do, to a friend, from whom they buy it back upon receipt of the loan. And buy it back they must, since they live in an environment where life without it is impossible.
It’s a common mistake to think of cars as economically OK because they supposedly “pay their way” through petrol taxes (if we are to ignore rates contributions to local roads), but public transport as a huge drain on finances because of the need for subsidies. What this ignores is that cars are more expensive, but that cost gets individualised and is often hidden in higher costs for land (as you must have somewhere to park your car) as well as the lost opportunity to buy a house, because you’re spending so much money on keeping the car(s) on the road. One wonders what percentage of income is spent on their cars by larger, poorer families in parts of Auckland who always seem to have two vans or people-movers in the driveway. Where’s their freedom?
I guess some could argue why I don’t arrange my life in such a way that I could be car-free, and I guess there’s the slightest opportunity that that could be possible. However, because of how slow and unintegrated and unreliable our public transport system is in Auckland, I would probably spend twice as much time getting between places (particularly as I tend to drive off-peak and catch the bus at peak-times) as I do now. So in order to retain a somewhat decent quality of life I feel that I am auto-dependent, at least in the need to own a car.
And that’s damn expensive.
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Interesting post. I’m not sure what the estimate for the average annual cost of owning a car in NZ is, but I’m sure it is quite a lot. In NZ, the average car is driven 15,000km a year and it gets around 15km/l, so needs 1000L of fuel. That’ll cost $1800. Registration is $400 a year, third party insurance (pretty much mandatory) is about $200 while theft/damage insurance is highly circumstance dependent but lets say is $500 on average. Average annual maintenance, oil, tires etc. would come to maybe $800? I guess parking is a hard one to figure, with all that “free parking” out there people often don’t directly pay much, but lets say the cost of keeping it offstreet at home is about $1000 a year. So that costs what, 1800+400+200+500+800+1000 = $4700. The largest potential cost comes in depreciation, which range probably ranges from a minimum of near $1000 for the cheapest cars (you wouldnt expect a $1k car to run much longer than a year) to huge amounts for the really expensive cars out there, but probably around $4000–5000 for a $25k car. So that could easily be $8000 a year to run a car. Even this cost is much less than an AA estimate I found from 2007, which puts the per km cost of a 2L+ petrol car at 85.9c, so the annual cost of 15000km would be more like $13000 without taking parking into account. Wow, that’s a lot of money. Even the most frugal car owner using it very occasionally probably pays $2000-3000 for the privilege.
I think that people pay this because the only day to day cost is in the fuel. At the last spike in fuel prices we saw a big drop off in the use of cars even though the overall cost of running them had increased only marginally. This is a common effect in economics, where people are seem to prefer to spend large amounts occasionally over spending small amounts frequently, even if the sum of the small amounts is much less than the large amount. That’s why companies are always trying to lock you in to subscriptions — people are happy to pay that one off hit for “unlimited access”. On the other hand, micro-payment systems where every time you use something (eg, read a news article on a website) you pay a trivial cost, have never taken off because they is an apparent mental cost of deciding whether or not it is worth spending even this trivial amount at every turn.
And I was just wondering, what stops you from using a bike in Auckland? It’s the bicycle that frees me from any desire to own a car in Auckland.
That said (sorry about 3 comments!), I do have access to a car if I need one as people I live with are generous with theirs. If I didn’t have that, access to the North shore, in particular, would be difficult.
Two reasons really:
1) Most of the trips that I need a car for involve a trip across the harbour bridge.
2) Most of the trips involve a 6 year old.
I experienced a similar set of problems – though since I already don’t have a car, this was with my girlfriend’s car progressively braking down, and taking more and more money to fix. For her, the biggest hurdle to not having a car is not being able to drive down and visit her family in the country, so I can understand her not wanting to ditch the posession totally. But it’s irritating how much she has to spend to keep the clunker going (or get a better new one).
On a related thread, I have a couple of friends who were facing a 100,000km service and cam belt replacement on their ten year old car. Tthey have had it for the last five years and it was initially bought for $14,000. Being a big job the cam belt and service was anticipated to cost $3,000 dollars.
So, rather than “waste money on that old car” just yesterday they went out and bought a new car off the showroom floor for $19,000, less two grand trade in on their old car.
Apart from the fact they have now spent $33,000 on buying cars in the last five years (I don’t want to think how long it would take me to save that kind of sum, probably about five years I guess!), I really want to know why people seem to lose all financial sense when in comes to vehicles?
I mean really, this is the same guy that only goes to the movies on Tuesdays so he can get a $9 ticket. He will scrip over four or five bucks at the cinema but when it comes to cars he is perfectly happy to drop $17,000 to save spending $3,000 on repairs. Is car advertising so powerful? Are cars actually that much of a consumer item that people feel the need to buy a new one every few years?
The best two decisions of my life:
– Quitting drinking
– Quitting car ownership
Interesting question Nick. I guess we have a pretty ingrained car culture, and it is seen as linking quite strongly with our feeling of what our status in society is. So I suppose logic flies out the window a bit.
This is where car sharing schemes come into their own (http://mobility.ch/pages/index.cfm?dom=6), you have access to cars whenever you want, without having to worry about parking, repairs/maintenance, insurance etc. If you don’t use it you don’t pay and when you need one you just grab one. If you need a big one you take a big one, if you need a small one, take a small one. Buying a car, locks you into ongoing costs regardless of how much you use the car, and removes any flexibility in terms of its size. Furthermore, why deal with expensive repair bills when someone else can do the worrying for you.
The expense of a car is further demonstrated by the fact that that $33,000 spent over 5 years for 2 cars, would have bought 10 years of unlimited PT travel in Switzerland (http://mct.sbb.ch/mct/en/reisemarkt/abos-billette/abonnemente/ga.htm). And, you don’t have to pay for petrol when catching a train.
This is where car sharing schemes come into their own (http://mobility.ch/), you have access to cars whenever you want, without having to worry about parking, repairs/maintenance, insurance etc. If you don’t use it you don’t pay and when you need one you just grab one. If you need a big one you take a big one, if you need a small one, take a small one. Buying a car, locks you into ongoing costs regardless of how much you use the car, and removes any flexibility in terms of its size. Furthermore, why deal with expensive repair bills when someone else can do the worrying for you.
The expense of a car is further demonstrated by the fact that that $33,000 spent over 5 years for 2 cars, would have bought 10 years of unlimited PT travel in Switzerland (http://mct.sbb.ch/mct/en/reisemarkt/abos-billette/abonnemente/ga.htm). And, you don’t have to pay for petrol when catching a train.
Here in Aussie it costs about a thousand buck a year just for compulsory insurance and registration. That’s only a few bucks less than the price of an annual metcard, and that’s before you actually buy a car, service or repair it, fuel it or pay anything on parking.
Yeah the fixed costs for registration in Australia are huge. I’m more of a fan of lower fixed costs and higher variable costs (ie. higher petrol tax, lower registration) myself.
Are there any car clubs in auckland yet? We’re members of streetcar in london. Handy for those rare occasions when you need a car for a couple of hours.
I can imagine doing the same when we move back to auckland, cycle to work, own one car for long weekends away etc, and car club for the occasion when we need need a 2nd car.
There’s Cityhop (www.cityhop.co.nz) but their cars are limited to the CBD area. I use them from time to time when I require a car after I’ve left home for the day. (My Discovery Monthly pass takes care of most travel).
Car sharing and short term car hire will likely take off as petrol costs go up in the next couple of years.
Clarification: The pick-up/dropoff point of their cars are only in the CBD. They can of course travel outside of that area but you have to go to the city centre to pick up and return it.
here is a link from some people in Chicago that have explored this issue of the relationship between housing affordability and auto ownership. in the United states we have found that those who live in the suburbs also pay higher costs for transportation/people moving. http://www.civicfootprint.org/
Your piece reminded me of these two French articles posted at Copenhagenize:
http://www.copenhagenize.com/2009/11/social-ideology-of-motorcar.html
http://www.copenhagenize.com/2009/11/energy-and-equity-by-ivan-illich.html
Andrew:
Thanks for the link, great to see these things taking off. Much more expensive though, here we get a VW polo for £4.95/hour. And the range of cars is much better , 8.95/hour for a VW transporter van, handy when you move flat!
Still with city hop, and if you live near the CDB, it seems feasible to me to cycle or PT to work and have one less car in the planet. ( good thing about them in london is the cars are everywhere, never more than a 5 minute walk. )