Saving$ on Transportation

On the path towards financial independence, the Savvy Solo must consider the costs of the big 3 expenses in life: housing, transportation, and food. In this post we explored some areas that could help tame the hangry beast that is our food budget. Generally speaking, transportation is the 2nd biggest fixed cost for many. It’s worth reviewing exactly what our options are, and where we can save.

The US Bureau of Labor Statistics has reported that Americans spent north of $13,000 on transportation alone in 2023, and this number is steadily climbing! For this amount of money, a Savvy Solo could max out both their Roth IRA, HSA, and have enough cash left over for a luxurious vacation! Naturally spending $0 on transportation isn’t feasible for the vast majority of us, but there are ways to cut costs in this area.

Let’s explore a few ideas and see which ones can be applied to your situation.

Hear me out!!!

I get the feeling a lot of readers either brushed past this part, or X’d out of the blog entirely 😂. Fair enough! Still, I think it’s a feasible question for all of us.

For those of you still with me, I want you to honestly ask yourself what you need a car for other than getting to work. Going to the grocery store? Currently Amazon Fresh will deliver groceries for free once you hit the minimum dollar amount. There may be other local grocery stores with better pricing and free delivery in your town, it’s worth checking out. This goes for all non-grocery purchases too, Amazon isn’t the only one out there offering free delivery on just about everything you might think up.

Going to a friend/family member’s house once or twice a month? Consider utilizing public transportation. I say this with full knowledge on how privileged I am to be in the New York area. The subway in NYC is the easiest, and quite honestly best, way to get around. Obviously, this isn’t the case everywhere, but it’s still worth checking out your local bus/train routes to see if it can get you within walking distance of where you want to go.

Bringing heavier things to an event or hobby that you don’t want to bring on public transportation? I haven’t seen anyone carry golf glubs while boarding a bus either. Ride share apps aren’t just for the late-night partiers, they can get you to your location no matter the time of day or state of mind 🤪. It’s a hell of a lot cheaper to utilize Uber or Lyft every so often then owning a vehicle.

What about an emergency? If you are in an emergency that you are physically able to drive to a location, then you are in a situation where you could just as easily hail a cab or utilize a ride share app. If you are in such an emergency that you can’t drive yourself, and nobody else can drive you, then you need an ambulance, and it doesn’t matter if you own a car or not.

Alright, alright, alright, but I still need to get to work, right? Mr. Money Mustache famously rode his bike (not motorcycle) to work every day for years while on his path to financial independence. So did Scott Trench, CEO and President of BiggerPockets. Here’s the biggest kicker, at the time they both lived (and I believe still reside) in Colorado. Not exactly known for year-round beautiful weather!

Of course, biking to work and other events isn’t really an option for everyone. Naturally, taking public transportation can be a bit of a headache at times, and utilizing the ride share apps can feel a bit costly. For some of us owning a vehicle is actually the most cost-efficient path right now. Break down the expenses on each end and see if that’s actually the case.

Alright, so let’s say you have determined that owning a car is worth it for your situation. Does that mean you really need a beamer to get to Aldi? That fully decked out pickup truck looks pretty sweet. I bet all your co-workers at the office are jealous… till they realize how much you spent on a depreciating product 😬.

Yes, that’s right! All vehicles on the road right now are depreciating in value as you read this, which is why calling it “an investment” makes me go bonkers. Brand new cars will generally depreciate in value by 20% in the first year! Not to mention, the insurance premiums on newer vehicles goes up because of the higher risk to the insurance companies.

We’ll discuss best processes on purchasing new/newer vehicles from dealerships in a future post. For now, the Savvy Solo who is looking to save on expenses (to either get out of debt or reach their FI number) would be best avoiding the dealerships all together. Those salespeople might talk you into buying a worthless warranty, or an expensive upgrade that doesn’t actually give you any value. There are also a bunch of bogus dealership fees that come with going there, it’s simply not worth it for most.

Instead, consider checking websites like cars.com or autotrader.com (or even check your local paper) to buy a used car directly from the seller. You’ll want to check Consumer Reports to see if that specific make & model has had any issues in the past, and check KBB for the current value. You can meet them at your local mechanic to get it checked out before any agreements are made on purchase price. Dealership fees can run $2k-$3k at times, which would equate to 3-5 major mechanical issues on this used car for this to even out. If your local mechanic gives you the green light, it’s unlikely that you’ll run into one of these in the near future.

Some might be worried about safety features of older cars, particularly solo parents. My first question is, what were your parents driving when you were younger? Was it a mechanical death trap like the rest of us? We made it out just fine. Moreover, what safety feature does the 2025 car have that the 2015 car does not? All the crucial safety components are still going to be there, but if there’s something in particular that’s a “must have” I promise you there’s a used car being sold that has it.

For those that have more than one car per household, ask yourself if it’s really needed. For most solos, this is a non-factor, but many solo parents might feel the pressure to purchase a vehicle for their children. Even if you are in the financial situation to do so, it’s not always in your best interest. Car insurance is skyrocketing for everyone, particularly teens. Consider letting them utilize ride-share apps till they are old enough to make their own decisions about owning a car.

We established that vehicles are a depreciating product, so why own? Unfortunately, in most cases, leasing is an even worse deal than owning a car. Up front, you might think otherwise since leasing will usually have a lower monthly payment than owning. Don’t get suckered in!

Leasing always comes with some limit on mileage allowed for the life of the lease. If you don’t drive enough to come close to this limit, then perhaps you don’t need a car in the first place? There will be fees to pay for going over this limit, along with fees for any knicks or dings on the body of the car. Not to mention, leasing a vehicle means that this isn’t really your car. If you make any customizations to it (i.e. cool hubcaps or a new sound system), those go right back to the dealership when the lease is done. What happens at the end of your 3-year lease and those payments are done? You have the opportunity to get a new lease and start up new car payments all over again. 😩

Instead, if you buy a car, you can do whatever you want with it (within legal limits). If you ding it up on a parallel park, no big deal! Want to take a road trip on your next vacation? Go for it! You won’t have to worry about mileage or about a shopping cart flying out of nowhere (I swear they are in every parking lot I go to 😂).

Most importantly, for those that don’t have the cash to pay in full, you’ll have the opportunity to make larger payments than necessary and eventually reach a point where you own the car outright. This is where the value of ownership comes into play, and you’ll never reach this via leasing. Leasing can be a vicious payment cycle that never ends.

If it is determined that you need a vehicle to get around, get a used vehicle that’s comfortable as described above, and drive it forever! If it’s less than 10 years old, it’s not old enough yet! Even when mechanical issues do pop up, it’s generally cheaper to get the fix done than taking on new car payments. When checking out Consumer Reports for your next vehicle, you might notice that Honda and Toyota have many models in the top ranks. These brands have a history of longevity and smaller mechanical costs; it’s worth taking into account since we are looking to drive this thing till the wheels fall off. 🤪

Across many of our fixed cost line items, we will come across numerous ungrateful suppliers. That is to say that the supplier of the product or service we are purchasing is far more focused on acquiring new customers rather than customer retention. The entire car insurance industry falls into this category. This is why we see so many commercials and advertisements trying to move our business to their company.

When’s the last time you got a quote for same or similar coverage on your vehicle? If you are anything like my former self, you have stuck with the same company for a decade or longer without thinking about it. It’s worth taking the time, once a year, to get your feelers out there on how much you could be saving. Go to 3-5 companies and request a quote for exactly what you are currently covered for. Most of them you can do online; but doing it in person or on the phone is always an option as well.

If you are happy with your current company, take the lowest quote and see if your car insurance provider can match it. When I did this, I was blown away by the amount I was getting ripped off, so I didn’t even give my old insurance company the opportunity to match. Still, you’ll want to make sure that the company you choose is legit before making the switch.

Don’t always go with the cheapest quote blindly, you’ll want to check out Consumer Reports or the Better Business Bureau to see how well they are rated by other customers. Insurance is one of those things that you hope to never need, but you’ll want some level of customer service and cooperation from your servicer in the times that you do.

Another note on car insurance, you might get a discount by bundling home/renters’ insurance and auto. This isn’t always the case though; I know many people that have the two separate and are saving more overall. If one of the companies you approach offers a bundling discount, it’s worth getting a quote on the whole shebang and breaking down the numbers to see if it makes sense.

The price of gas is one of the most monitored things by Americans, almost hilariously so. It’s almost guaranteed someone will bring it up by the water cooler when it goes up a nickel per gallon. That said, gas isn’t getting any cheaper, and any savings in this department can go a long way.

The US Department of Energy reports that driving aggressively can lower fuel economy by 15% – 30% on the highway, and 10%-40% in stop-and-go traffic. It’s also reported that most vehicles are at the highest fuel efficiency between 40 and 55 mph. Constantly hitting the gas and breaking repeatedly eats up gas, which in turn, eats up your wallet. If driving safely for the sake of safety doesn’t motivate you alone, let your bank account take the wheel.

Using cruise control on longer drives will greatly assist here. Not to mention, it will keep your speed moderated which will help prevent a speeding ticket 😁. It’s also reported that driving fast regularly could damage the engine and other components of the car, such as the brakes. No need to risk mechanical failure unnecessarily, ease back that lead foot a bit! (Mostly talking to myself on this one 😂, you can’t take the New Yorker out of me!)

I know, I know, this isn’t the sexiest option for most. Actually, maybe it is… if you ask that cute co-worker? 👀 Make a joke about gas prices and see if they want to save on their daily commute! Who knows, maybe you’ll both be coming from the same place in a future morning anyway. 🤪 Consider it a double win, even for the solos not looking for a relationship, gaining a new friend never hurt the relational health!

Another way to tackle this is to carpool via ridesharing app. If you and a co-worker or friend are headed to the same place, you can set the app to have multiple pickups (or drop-offs). I think most currently utilize this feature when going out on the town, but there’s no reason a Savvy Solo couldn’t set something up like this with some co-workers for the daily commute.

Before getting into the weeds of finding the perfect credit card, it’s worth asking yourself if having a new credit card is going to be a benefit or hinderance on your overall financial health. Check out the best practices when it comes to credit card use, and I wouldn’t suggest this option for those that are currently in credit card debt.

A gas rewards credit card and/or utilization of the gas cash back apps won’t make you rich, but sometimes every little bit helps. Let’s say you have a credit card that offers 4% reward on gas purchases, and one of the apps offers 2% cash back. If it costs $40 to fill up your tank, you’ll get a total of $2.40 back from that transaction. This means after 17 fill ups, you’ll essentially get a free tank of gas! I know that doesn’t move the needle much, but it’s a total freebee without much effort on your end.

Transportation is generally the 2nd biggest expense in our life. I’m not going to pretend that most of us don’t need a car; but with the rising costs of gas, insurance, and regular maintenance all rising it’s worth taking a closer look. For those that find it valuable to own a vehicle, despite these costs, ask yourself if you really need that vehicle. By minimizing costs in this area, we have the potential to hit financial independence years, even over a decade, sooner!

Public transportation, depending on where you live, may offer a good deal on bulk purchase. Consider getting a monthly or annual train/bus pass if utilizing for daily commute. It’s totally understandable that most aren’t going to jump on this train (pun fully intended 🤪) right off the bat. Instead, spend a month trying out these different methods before selling your car and see if it’s feasible. In fact, gamify the whole experience! Think about setting a SMART goal to hit a certain amount in your car fund before making that next vehicle purchase!

Stay classy Solos! ✌️