the cost scheme

I am about to sell my old ’89 Volkswagen Golf II on sunday afternoon and just completed the excel sheet I have been maintaining over the last 5 years to keep track of car-related expenses. A cost overview where I would enter amounts spent on insurance, tax, repairs (maintenance) and – most importantly – petrol costs.

Different friends have been laughing about this to some extent, as I always noted down the mileage whenever I refueled the car and collected the bills. To their understanding, there would be no need in having an overview what the overall car costs are, also since the car is too old. It has been my first car though, which is why I wanted to have an overview of what I have repaired during the years and how much I’ve spent on this and that. Also, knowing how much petrol the car consumes indicates up-coming problems with the sparks, carburetor, petrol pump, etc. – just think of it as a regular, passive medical check-up.

Well, turns out I’ve driven the car for a total of ~ 71.000 kms during Feb. 2001 and Sept. 2006 (68 months), spent ~ EUR 895,- on tax costs, ~ EUR 2063,- on insurance costs, ~ EUR 2.892,- on repairs (cheap!) and ~ EUR 4.687,- on petrol – which generates a total of ~ EUR 10.537,-. And please be reminded – I bought the car for ~ EUR 1.636,- EUR in Feb. 2001 ( DEM 3.200,-).

Now, I did a lot of minor repairs by myself and have a friend who runs a garage and we had this deal that I would help him out with some computer stuff and he would repair my car whenever professional work would be needed. I bought spare parts at a wholesale price level and even ordered a new exhaust system via Ebay one day for a very jua kali price. Tax costs could have been lower by installing a different engine starter which would have lowered the tax classification from Euro1 to Euro2 – but it didn’t make sense for such an old car. Insurance costs where relatively cheap as I had registered the car on my Mzee’s name who got a huge discount. Petrol costs in Germany have risen for at least 27% during 2001 and 2006, which also explains why I’ve travelled even less kilometres with the car during the last two years (2005: 7.000km, 2006: 4.000km).

I think it’s interesting to know that you can buy a car for a small price but are forced to spend huge amounts on maintaining it. Also, when I look at unavoidable costs like insurance, tax and petrol (average consumption ~ 8l/100km), it seems that I did the right thing by buying an old (very old) car instead of leasing a new one. After all, I spent an average of about EUR 0,17 per driven kilometre – which is cheaper than what I would have spent on a new Toyota or so.

Now what is needed is to compare these expenses with others in Kenya and the US (for instance). Anyone?

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  1. I have been doing some research into something similar as I am trying to compare the benefits of buying a (USED) SUV vs. buying what they call a minivan around here. The SUVs go for about $4000 less than a minivan for the same spec and the argument I have in mind is that even if the SUVs use twice as much gas (petrol),they are still cheaper from an purely economic standpoint.

    Using concrete examples:

    A 2003 Dodge Durango with all the options with less than 70,000kms goes for about $18,000

    A 2003 Honda Odessey with under 70000kms with all the options is at least $23,000

    (BTW, the Durango goes for about $42,000 new while the Odessey goes for about $35,000, guess which holds its value better . . . )

    So, by buying the SUV, you save about $4000.

    At the pump, for the Honda, you spend about $50 a week on gas and you would spend about $110 a week on gas for the Durango (double the amount of gas assuming gas stays at $.87 a litre, it has been as high as $1.20 in the last year and is currently at about $.69)

    Over a 4 year period (assuming this is the payback time for the car, you would spend

    For the Honda

    Best case scenario:
    50 lt tank x $.69 per fill up per week x 52 weeks x 4 years = $7176

    Worst case
    50 lt tank x $2.00 per fill up per week x 52 weeks x 4 years = $20,800

    For the Durango (SUV)
    Best case scenario:
    1.5 * 75 lt tank x $.69 per fill up per week x 52 weeks x 4 years =$16146

    Worst case
    1.5 * 75 lt tank x $2 per fill up per week x 52 weeks x 4 years = $46800

    Over 4 years, the Honda Minivan costs you

    Best Case
    = $23k+$7176 = $30k
    Worst Case
    = $23k+$20.8=$43.8

    And the Dodge full size SUV costs

    Best Case
    = $18k+16.2 =$30k
    WOW – same price as the minivan and you ride in style!!!

    Worst Case
    = $18k + $43.8 = $61.8k
    You take a shotgun and blow your brains out due to high cost of driving this puppy.

    Me, I want to go with the SUV but gas prices are all over the place and are pretty scary.

    – Steve