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Stop the Nonsense
Denial of Consumption II: Cars

By Peter Schmitz * 13 December 2002

Welcome friends if this is your first encounter with our DoC initiative. This article will deal with Man's dearest toy, the car as such. I will show that cars are much more expensive to run than you might be willing to admit, and suggest ways in which you keep your mobility but get rid of your car.

In the introduction article to this series I argued that the prime objective of every government is to extract as much money form the taxpayer (you) as possible. I proved that a large part of government income is through illegal sources like drugs or corruption and that our duty as responsible citizens is to protect as much as possible of our honest money from abuse by governments. One way to do this is through taking responsibility for and control of our spending habits. I identified a number of targets to withdraw funds from and said that we could start saving a little egg nest or redistribute those funds to responsibly operating businesses (local organic farmers, fair trade organisations, etc...) or neighborhood inititatives instead.

The Matrix
If you saw 'The Matrix' I hate to tell you but you are in fact one of those human battery cells, fueling the system with the work of your muscles or brain and the salt of your sweat. This movie is absolutely amazing in its profoundness (as is 'The Truman Show') if you want to see the message and the message is this movie is not fiction, it is here.

If you own more than one car in your family, this article is for you. If you live downtown and own a car, this article is for you. If you think life is unimaginable without a car, this article is for you.

If you like cars as much as I do (no cynicism for a second) you might ask yourself where that affection came from. The reason is simply that you are in the 'car' matrix. Your father at one point bought a car, or you can't even remember a time when the family didn't have a car. Most of the time your family went out on a trip, dad was driving, yes? You learned that a car was a thing that brought freedom in many ways to your family. Freedom of movement, freedom for dad to have a job and get there in the morning and get back home in the evening. You learned about wonderful cars, Porsches and Ferraris, cars that nobody you knew would ever be able to afford. In short, cars on balance became a rather emotional issue.

Having said this, cars are also very expensive. Most men (many women are immune) develop a curious blind spot concerning how expensive it REALLY is to own a car. Different countries will apply different rules as to how to penalize the posession of cars. Singapore for example heavily punishes the posession of cars and makes it very public in order to discourage citizens from owning cars. Fair enough. Many U.S states heavily punish the posession of cars and don't make an awful lot of noise about it in order not to lose one of their most important source of revenue: cars.

Cars vs. Mobility
Many of us think that owning a car provides us with mobility which in turn increases the quality of our lives. Now lets look at that statement for a second. It is certainly true that mobility increases the quality of my life. Funny thing is I don't own a car any longer. I sold my car at the beginning of this year and I can't begin to tell you what a difference it made to the quality of my life. I buy mobility today from people and companies who specialise in providing mobility. When I go far way I fly. When the excellent train system in my country is more efficient I take the train. When I take my love to a remote location over the weekend I rent a nice car from the car rental. Mobility has nothing to do with car ownership I can assure you.

Just consider the typical basic costs of car posession and we're staying real basic here. For a typical SUV these figures easily double or triple:

- Depreciation: around $200/month for a typical Japanese lower middleclass car
- Insurance: around $50/month for a long term driver with few or no accidents on record
- State car-Tax: around $10/month
- Repair: difficult to generalize but lets say $50/month including scheduled maintenance and repair

I intentionally used NRFs (nice round figures) to not get bugged down into discussions about a dollar or two. So in the big scheme of things this means - before you even drive a mile - this car costs you between $3,500 and $4,000 a year. For a majority of Americans this will represent a large chunk of their total income. Remember, we haven't even bought one gallon of gazoline yet!

The lines below are an excerpt of an extremely enligthening discussion with Tommy from N.C. who in response wrote to me the following:

" When you look at the following factors:

1. Costs
2. Depreciation
3. State sales tax
4. Upkeep
5. County Property taxes
6. Tags
7. Registration
8. Inspections
9 . Luxury taxes.
10. Interest on the loan
11. Tires
12. Parking
11. Liability Insurance
12. Comprehensive insurance. { Property damage]
13. Repairs
14. Parking and other Fines

In short you are looking at a massive sink hole. Since the per capita income in NC is approximately $22k the buyer pays around 18% of yearly before tax income for the car. The poor always pay more but their whole ego and sense of self-worth is tied to that damn car. How tragic."

So obviously driving small and old cars until they fall apart would go a long way towards saving A LOT of money:

- Depreciation: 75 instead of 200. Savings $1,500 a year
- Insurance: 25 instead of 50. Savings $300 a year (just insure other party's damage, not own)
- Tax and repair: no savings.

So with these items alone I calculate savings of $1,800 a year and this is based on very conservative assumptions. These savings alone could amount to what many people have to work 10-15 days a year for. As a side-thought: Are you really prepared to spend two full weeks of your life each year WORKING FOR A BIGGER CAR???

My car at the time costed me roughly $750 a month including everything.

A lot of the above figures goes into tax income for your friendly government one way or the other, so by cutting back on those figures you actually make an important political statement as well. This was elaborated upon in the first article.

The fun really starts when you consider getting rid of your car altogether. The U.S. train system is not the best I've seen in the world, I admit, so a lot of people will depend on their car. But do you depend on two or three cars in your family? I bet you don't, one has just gotten so accustomed to it. Do the calculations you will be digusted at what this extra car(s) cost you.

So how do we give up cars but not mobility? The answer is through the blessings of neighbourhood. What I suggest is that you consider starting a private car pool in your neighbourhood. My findings are that if ten families share 3 cars, then these three cars will still sit idle roughly 50% of the time. There are many ways to do this: Either you gather together and start a proper company structure maybe as a partnership or even limited company. You choose who sells their car into the pool and the pool will buy those selected cars from its members and then operate them on behalf of all members. The others sell their cars to poor suckers who still haven't gotten the point. It is important that you view the car pool as a seperate legal entity which has to be totally self sufficient and at least break even after all provision for repair, insurance and future purchases of vehicles. Unfortunately I can't work out all the details for you here, I'm being a bit long already. I suggest that as a group you seek advice from a tax adviser experienced with small businesses. He/She will be able to tell you how to allocate costs and manage the company. Once everything is setup it is a very easy thing to do and a home PC will be all you need to do the scheduling and invoicing (2h a day job, could be paid or voluntary). If you live in places like CA you might even be able to get subsidies for reducing traffic, so stress your imagination and explore all avenues. You could even found your own car rental business serving the neighbourhood at reasonable prices and start with two or three cheap cars with very limited risk and upgrading as and when revenues come floating in.

Yuppies, heads up!
If you're a wealthy single or couple with no kids and you live in a stylish loft downtown and you still have a car, all I can say is you are amazingly stupid as well. Nobody in his or her right mind living downtown needs to own a car. AVIS and HERTZ are falling over their own feet to make you hire their stuff. As an example I rented a nice Merc 220 with all the fixings Friday to Monday noon for $95 all in and the rental station is just around the corner. There were smaller cars for as little as $40 for the entire weekend. The nice thing is I don't have to bother about depreciation, garage, damage, repair, theft or where I left the damn pile of tin and plastic 5 days ago when I used it last time. Whenever I need a small city car, or a proper car to see a client or a Van to transport stuff, that's just what I hire and pay for. However most of the time I don't need a car at all and THAT's what I hire and (don't) pay for as well.

Think about it. Get rid of your car and discover real mobility. Ride a bicycle, get fit, slim and rich in the process. Very soon a giant tidal wave of used cars is going to swamp the U.S. - resulting from the current 0% boom. If you have a used car to sell, you better start designing the ad for it or you will be stuck with it forever.

As always, comments are welcome especially from folks who already run private car pools.

See you soon

Peter Email the author

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