It costs us less to own and operate three cars than it would to own and operate two cars. Yep, you read that right. If you’re surprised, then join the club. I was very surprised at the time that I figured this out. Before we delve into explaining our transition to our current automobile scenario, let’s start at the beginning.

A Common American Car Story

I didn’t learn how to drive until I was 17, this was due in most part from having nightmares of me driving the family van off of a hillside. This fear and my lack of financial savvy to have enough money to get my own car effectively led me to have to be poked and prodded into taking my exam a year later than most of my peers, failing once then finally getting it the second time. I then would drive the family minivan when I needed to for work (Wendy’s) or occasionally my father’s Jeep. Much of my late high school and early college was spent taking public transit when I needed to get somewhere for school or work.

My first car came 4 years later it was a 1996 Chevrolet Corsica – it had been my grandmother’s car. This of course was at no cost to me. While this served me well around town, once I started my software development career, this aging vehicle simply didn’t hold up with the weekly commutes to north western PA for work. So I did what any normal American would do, I put a few thousand down and financed a brand new car – a 2007 Dodge Caliber. This sounds so asinine now, but I bought it because the glovebox had a can cooler in it. You see I had a very unhealthy addiction to Pepsi One and… well that’s another blog post of its own. It was a mediocre crossover with a giant blind spot, but it was mine for a meager $275 per month.

As we started our family, my wife drove a 2001 Honda CRV – a fairly capable SUV, though I absolutely hated driving it. After the birth of our second son in 2012, we did what most freaked out consumers do – we bought a larger vehicle – a used minivan costing us an inordinate amount of money. We have that vehicle to this day – a 2008 Honda Odyssey – more space than we thought we would ever need (little did we know) and as a bonus the DVD system in it served us very well on long road trips when the kids were little. This used army transport set us back $336 per month.

Fast forward to late 2013 and anticipating another child and wanting to make sure that BOTH of our cars could pick up EVERY person in the family with more than enough space – I was looking to trade in my paid off Dodge Caliber for either a used Minivan or a Mazda5. In a spurt of true consumer boneheadedness I bought a new 2013 Mazda5 because “it was only $1,500 more than the used ones that I saw” This vehicle could best be described as a “baby minivan” based on its sliding doors and three rows of seats – though the third row wouldn’t be comfortable to anyone over 4’ tall. Despite the many great memories I have of trips in that car, I got garbage fuel efficiency driving it, mostly because I drove it like an American – with a lead foot. This 20 mpg people mover set me back $308 per month. I didn’t care about the total purchase price or how much I was paying in interest at the time – pretty much like most people that I knew at the time.

Three Kids, Two Tanks

So right around the time that my wife and I started reading Mr. Money Mustache and gradually making some lifestyle changes our commuter car fleet consisted of the Odyssey and the Mazda5. The table below shows our monthly commute mileage (assuming 4 weeks in a month to keep it simple), average MPG of each car,  cost per mile (assuming $2.50 per gallon which was the price when we made these changes) and total cost in fuel per month.

Vehicle	Miles Per Month	MPG	$ Per Mile	Fuel $ Per Month
Mazda5	600	20	$0.125	$75
Odyssey	480	16	$0.15625	$75

Now this included 40 miles per week of van traveling as a family (visiting family in the city most weekends and random errands). This number doesn’t include any extra trips made in the Mazda5, so more often than not fueling the cars came out to $200 combined. We didn’t track specifically back then but we did each budget $100 to fuel our cars and that was always spent. The next part of our equation was insurance. We were spending $110 per month to insure both cars for 100/300/100 liability and $500 deductibles on comprehensive and collision for both.

The last piece was registration and basic inspection (with no issues) for each car, and combined these came out to about $100 per car annually.

So our running tally to own, operate and insure our two vehicles was as follows:

Loan Payments	$644
Fuel	$200
Insurance	$110
Registration / Inspection	$16
Total Per Month	$970

Electric Cars – Not Just for Tree Huggers and Rich People

Shortly after tackling a pretty drastic move to a new house, we buckled down in the fall of 2016 ready to make some changes to our spending and lifestyle. Just about that time this article came out and it immediately piqued our interest. I started dissecting the internet for as much information as I could about Nissan LEAFs and electric vehicles (EVs) in general.

Over a few weeks of research I started piecing together a plan. After our move to the new neighborhood, my wife was transporting the younger kids to childcare / preschool on her way to and from work. Also, our eldest son was taking the bus to and from school. We soon realized that having a an identical setup where the entire family could fit into two vehicles was far from efficient and never actually utilized in the case of my car. On the same note, using the 16 MPG van has not at all practical for commuting purposes, we rarely needed all of us in the car except for short weekend trips and vacations. The plan soon became to swap out my car for a Nissan LEAF, and add another Nissan LEAF for my wife to use as her commuter car and keep the van for when we all needed to be in the car together. It is worth mentioning though, that at the time, we were only a family of 5 and so we could fit all of us into a LEAF quite easily. That was all about to change in a few months, so the van stayed.

This chart is a recreation of the one above, assuming $2.50 per gallon and $0.13 per kWh. We will not use MPGe as this is a comparison of only power, not the monetary cost of that power. This is because the price of electricity and gasoline are not pegged to one another.

Vehicle	Miles Per Month	Fuel Efficiency	$ Per Mile	Fuel $ Per Month
Nissan LEAF #1	600	4 miles per kilowatt hour	$0.0325	$19.50
Nissan LEAF #2	320	4 mpkWh	$0.0325	$10.50
Odyssey	160	16 MPG	$0.15625	$25

Wow that works out to a total monthly fuel cost of $55, that’s MUCH better than $200! Now let’s look into financing. A quick note – obviously the best thing for us would have been to wait until we had the cash + trade-in value on the Mazda5 to pay for one of the cars outright, but we were impatient and wanted to get in on the EV market while prices were still low – we acquired them for $8,000 (2013 Nissan LEAF S with 30K miles) and $10,000 (2015 Nissan LEAF S with 14K miles). The payments wound up being $160 and $230 per month respectively.

I will admit that some of the math doesn’t jibe but that’s because we were underwater on the Mazda5 (it was a 6 year loan and we were only 3 years in) vs what the dealer would give us for trade-in. Knowing what we do now, we would never trade in at a dealer and never buy a car new!

Since the LEAFs were newer and they wouldn’t give us a reduced mileage discount on the van until they saw the odometer six months later, our new policy was $180 per month! At this point we knew that we needed to switch auto insurance. I did a few online quotes and was amazed – we could get the same policy from GEICO for $100 less per month! So we went ahead and did just that.

There was the added cost of registering and inspecting another vehicle, so we added another $8 per month (roughly $100 per year represented monthly, without bothering with decimals)

Loan Payments	$726
Fuel	$55
Insurance	$80
Registration / Inspection	$24
Total Cost Per Month	$885

While the difference between $970 and $885 isn’t mind blowing, it made it well worth the switch. We also knew that gasoline was sure to rise from it’s OPEC handicapped low of $2.50 per gallon (and it has since then, to around $2.90) and that electricity rates would increase but at nowhere near the same level. And we had a plan for that anyways.

I could get into the details of all of the myriad of maintenance that a gas powered car has that an EV does not, but I’m sure someone would retort back that there is the cost of replacing the battery in an EV after 5-8 years. Instead of arguing how battery prices are only getting lower and how there’s no real world data on the degradation rate of current EV batteries since the technology is always getting better, let’s just call the maintenance a wash.

But Wait There’s More

Now let’s talk about paying off debt. We started our strategic plan towards financial independence in mid 2016. Our initial focus was the reduction of monthly expenses and the elimination of debt. We spent the next year and some change paying off debt – one student loan and all three car loans – $34,000 worth of debt in under 15 months! This allowed us to begin 2018 positioned perfectly to start accumulating our savings that will eventually allow us to become financially independent.

After paying off these loans, our monthly cost to operate, fuel and inspect our vehicles is:

Fuel	$55
Insurance	$80
Registration / Inspection	$24
Total Cost Per Month	$159

We reduced our monthly auto expense by $811! Now with being able to take that money – $9,732 annually – and invest it every year, it could potentially grow (assuming 7% returns) to $143,874 by the end of just 10 years!

Now this is hardly an immediate change or one that would be necessarily recreatable by most people, but I feel that this only highlights how with some research and strategic planning we were able to greatly reduce our monthly spending.

How have you been able to reduce your auto expenses? Let us know in the comments!

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* I will get into the pros, cons, myths and common misconceptions about electric vehicles in another post. But in short, with the average American commute being 30 miles roundtrip, I strongly encourage everyone to do their research and see if an EV could save them money.