Car-free or car-stuck?

I have an important question that I’d love people to weigh in on: Should I sell my car?

Logically, the question seems to have a very simple answer: yes.

I keep writing lists and outlining the reasons why I should sell my car (and why I shouldn’t) and the balance seems to lie heavily in favor towards selling my car. And yet I’m having the hardest time extricating myself from my car. Despite giving up several things during my current ambitions towards doing and having Less, I’m still having the hardest time with the idea of selling my car.

Why? I’m a practical, logical, pragmatic person: why is this so hard to do? Why is selling my car so difficult? Even with the facts laid out, staring me in the face, I’m having the hardest time selling my car.

The prelude: why I bought a car in the first place

I used to live completely car-free. I lived in different cities and each time, I only walked, bused, or biked to get around – occasionally living the high life and taking a taxi when I felt like being luxurious.

And then I moved to California.

I lived in San Francisco for a year and a half before caving and purchasing a car. In December 2009 I bought a brand new car.

I purchased a 2010 Toyota Matrix from a dealer, priced at $17,490, with a $1000 rebate for being a recent college grad. The Kelly Blue Book value of the car, at new, was $20,049.  My purchase price was $16,490. With taxes, registration, and fees, I forked over $19,009.  Well, I actually forked over nothing – NOTHING DOWN.  Instead I signed a promise to buy the car over the next three years.  (As a somewhat-savvy consumer, I secured a 3-year financing plan with 0% interest.)

Why did I buy the car? I purchased the car because I was living 40 miles from my job and commuting an hour each way (through San Francisco, across the Golden Gate Bridge and back), and there wasn’t sufficient public transportation to get me to and from my job – at least at the time I bought the car.

I have since owned and paid for the car for 12 months – which means I have already spent $6,800 on the car payments.  I have a remaining $12,200 left to pay on the car over a 2-year period.

We all know that cars are expensive – but how expensive are they really? The actual cost break-down:

Keeping and maintaining a car is incredibly expensive. Here is a breakdown of my monthly costs of car ownership (calculated from the aggregate of one year of driving). Looking at it on paper, I’m stunned. The cost of the car has been unbelievable. In one year, this is what I’m spending:

Car payments$529 per month

Gasoline: (20,000 miles total, 25 mpg average, gas price is $3.15 in California, $2520 annually for gas) – $210 per month.

Maintenance: for one year (4 tune ups at $109 each) – $436 annually (for year one only), or $36 per month for maintenance.

Insurance: AAA Insurance – $109 per month.

Tolls and Fees: Crossing the Golden Gate Bridge every day ($5 each way) – $80 per month.

Parking: I’m lucky to have mostly free parking, unless I drive downtown. I spend about $50 a month in various parking fees. If you count the parking tickets from San Francisco’s crazy street-cleaning schedules and signage, then I spend an average of $37 a month in parking tickets (Thanks to Mint for alerting me to this). – $87 per month.

Drumroll, please.

Every month I spend approximately $1051 on my car.

$1051! What would I do with $1051 per month!

In addition, I have a substantial amount of debt from undergraduate and graduate student loans (more on that in a post coming soon) that I’m currently working hard to pay off. My student loan payments are to the tune of $700 per month. I’ll be honest: I struggle to make the car payment and the student loan payments each month.

Today: the current situation

In November, I moved back to San Francisco, because I couldn’t stand the long commute. Commuting through city traffic is tiring and psychologically draining – I quickly remembered why I disliked driving so much. In contrast, San Francisco is a hub of public transportation options – sometimes better or worse, depending on the neighborhood that you live in.

I now live 8 miles from my job in Sausalito. The drive takes about 15-20 minutes, depending on traffic. Parking at my job is easy, but parking in San Francisco is a nightmare – it can take up to 40 minutes to find a parking spot.  I have the option of purchasing a parking spot – but those cost upwards of $300 in a city like San Francisco, and I can’t stomach how much I’m already spending on the car alone.

I now have alterative means for getting to work – I can bike to work a few days per week, depending on the day and the weather. There is also a bus line that goes to and from my work on the hour, and takes about 30-40 minutes to get to work (it doubles my commute time, but I don’t have to worry about parking, driving, or concentrating on the road).

The (easy) conclusions – and some further hesitations

I’m starting to think that it makes sense for me to sell my car. Here are the reasons:

Living in a city – with ample public transportation, alternative car-sharing options, bicycle riding, and walking – makes having a car a luxury, not a necessity.

Getting rid of $12,200 of unpaid debt is a good thing. I simply don’t have the money – and thinking about paying for the car with my future earnings un-nerves me.

There are additional costs to car ownership – insurance, gas, parking, maintenance – that will continue to add up over time. (To the tune of about $450 per month, even after I’m done making the car payments)

The current value of my car ($14,000) is more than I owe on my payments ($12,200).

It aligns more with my current values in landscape architecture, city planning, and environmental behavior.

I like walking. I also enjoy busing, biking, and exploring different forms of public transportation.

To further underscore the reasons I should sell my car:

A car is a depreciating asset, and will not add any value over time. Struggling to make these payments does not help me reduce or eliminate debt in other areas of my life.

Public transportation to work costs $4 each way, or approximately $160 per month.

If I also choose to use a car-sharing program (like zipcar or city car share) on the weekends, I would spend between $50 and $75 for a half to full day of weekend use – but the cost would be elective, and not fixed.

If I don’t spend the money on the car, I can spend the money on: ___________ (fill in the blank: student loans, emergency fund, freedom fund, retirement savings, 401K, Kiva Entrepreneurs, etc)

I’m not sure where I’m going to be living in the next 3-5 years, and one of my dreams is to live abroad for a year and learn a new language. (If I do this, I won’t be taking a car with me).

No decision is permanent. If I do end up absolutely needing a car in the future, I could always buy a new car. Selling this one does not mean that I’m never allowed to own a car again.

Last minute hesitations: Some of my fears.

I am a little bit worried that it’s a mistake to sell my car after owning it for one year – it seems that I run the risk of losing the most money that way. Some people tell me that I should wait it out for the next two years, buckle down, and just finish making the payments – because I need a car and can’t possibly live without one. (Is this really true?) People also suggest that it’s foolish to buy a brand new car and sell a car within the first year of ownership.

However, I also know that sunk costs are sunk costs: what I’ve already spent on the car is gone. What I spend in the future is still up for determination. Do I want to spent $1051 per month on a car for the next two years? (that’s $25,244!)

It seems painfully clear, on paper, that I should sell my car. And yet I get in and drive it every single day – to teach swim lessons after work, to go to dinner parties, to meet up with people at new events, on trips to Tahoe, on excursions beyond the city limits to do fun things.

I am somewhat afraid of selling my car. I’m worried that I’ll miss it a lot after I sell it – and I will wish that I hadn’t sold it. Psychologically and emotionally, I’m attached to it.

Also, I’m stubborn: I don’t to admit I made a mistake in buying the car in the first place.

Tell me, what should I do? Can I afford to sell my car? Can I afford not to?