Why Two of the Most Common Myths about Car Ownership Aren’t True

by TTMK on January 29, 2015 · 6 comments

two cars or oneThe following post is from staff writer Melissa Batai

Must a family have two cars (or more)?

Are car payments an unfortunate reality because cars are so expensive now?

How we Americans think about cars is deeply personal. Many of us would never consider trying to live with only one car, just like we think it’s impossible to buy a car without a loan.

But the simple truth is you could live with one car, just like you could decide to never have a car payment again.

What Life Is Like with One Car

My husband and I have been a one-car family since we married 14 years ago. When we lived in the suburbs of Chicago, he took the “L” train every day. He used the time to read research articles for work, and he was very glad he didn’t have to crawl through rush hour traffic, especially when it was raining or snowing.

When we moved to Tucson, Arizona, surviving as a one-car family became much more interesting and is a bit more difficult for both of us. I have to drive him to and from the bus station, which is about 15 to 20 minutes one way from our house. He has to ride the bus for an hour to get to work.

Yes, he would like his own car, but for now, it’s not in the budget. Besides the purchase price of the car, we just can’t afford the gas, plates, insurance, maintenance and repairs. Owning a car is so much more than just initially buying it. We don’t want to commit to all of the expenses that come with another car.

Can You Buy a Car without a Loan?

Simply put, most Americans don’t buy a car without a loan. “Most consumers who buy cars need to finance at least part of their purchase rather than buying it outright—85 percent of new car purchases and 54 percent of used car purchases involve financing” (Center for American Progress).

Furthermore, “according to Experian, the average auto loan in fourth quarter 2013 was $27,430—an increase of $739 compared with the same period of 2012. The average used car loan was $345 higher, coming in at $17,974” (CNBC). Many of these loans stretch for six or seven years.

We bought our current car 10.5 years ago, and we had to finance $25,000. Our payments were $475 for 60 months, though we paid it off in approximately 48 months. I hated every month that I had to pay a car payment because it made our budget so tight.

I’ve vowed not to take out a car loan again. (My husband thinks I’m a bit crazy and that my plan isn’t realistic. Time will tell.) Right now, our car has 148,000 miles on it. One of the passenger side door handles just fell off. The car is well-loved (another way to put it is beat up), but it runs, and we haven’t had a car payment for 6.5 years.

We’re saving now for a car, but I highly doubt we will have enough saved to buy a new car when the time comes. We’ll probably be looking at a used car, and a fairly old one at that, but I will buy that kind of a car to avoid a large monthly payment that can extend for the next five to seven years.

My Questions for You

Do you think having two cars is a necessity for a family? Do you think taking out a car loan is necessary because cars are so expensive these days?

How do you handle car ownership in your family?

{ 6 comments… read them below or add one }

Emily @ Simple Cheap Mom January 29, 2015 at 11:22 am

We’re a single car family and don’t have a car payment. (our car was actually a hand me down from my in-laws but the car before that we’d bought in cash). I’m a stay at home mom and he commutes by bus from the suburbs into town. Works for us!


Melissa January 31, 2015 at 9:35 am

It’s nice, isn’t it? Even when I worked full-time outside the home, we were a one-car family because my husband took the train. Now, if I worked full-time outside the home, we may have a difficult time only having one car.


Jayleen @ How Do The Jones Do It January 29, 2015 at 11:25 am

In our family, two cars are a necessity. My hubby works long hours and we would spend a ton in gas and time if I drove him to work. That being said, if it is possible to get by with one car, what a money saver! In the past, we have purchased new cars and worked diligently to pay them off. We drive our vehicles for at least 10 years. I have a huge payment on my Tahoe right now, which isn’t fun, but we manage. The goal is to have the Tahoe paid off before my daughter starts driving. At that point, we will purchase my husband a new car and hand down the 2004 Dakota to her. We definitely make good use of our vehicles.


Melissa January 31, 2015 at 9:36 am

Buying cars new and keeping them is a great strategy. We bought our car new 10 years ago, and it has served us well. I hope it lasts for another few years until we get enough money saved for the next car!


Jon @ Money Smart Guides January 30, 2015 at 8:02 am

We have two cars and two car payments! The only reason we took out the one loan was because the interest rate is 0.9%, so it is basically like free money to us. I put a nice down payment on it so the monthly bill isn’t crazy.

For my wife’s car, she gets an allowance from her company that pretty much covers the monthly payment.

With that said, we are excited for the day when the loans are paid off. Before she bought her car, my wife was saving that allowance from her company. It really made a difference in growing our investments.


Melissa January 31, 2015 at 9:37 am

That allowance would be great for investing! Still, you’re doing great in the way that you handle the car payments.


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