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Practical Reasons to Become a One-Car Family to Get Out of Debt
If you’re considering becoming a one-car family, you may be in a good position to do so (or you may be better off financially) if any of the following apply to you:
- You owe a lot of money on your car and it’s negatively impacting you (this is something Dave Ramsey recommends too and, while I don’t follow him 100%, this is practical advice I agree with!)
- No one will be stranded if you carpool with your spouse/significant other/or even roommate
- You have great public transportation
- If you have other modes of getting around – some cities offer Express shuttle buses for downtown workers or some offices coordinate carpools among coworkers
- You could reduce your monthly outgoings by selling your current car and leasing a new one. With the lump sum you receive from selling your car you can pay off some of your debts, then you could lease a car for a smaller monthly payment than you would have been paying which would mean your monthly outgoings are less, on top of that your yearly outgoings will also be reduce as you will save money by not having to pay for servicing and an MOT isn’t required for 3 years with a new car. For more information on leasing a car reference this page.
If most of these reasons apply to you and you can make it work, it might be an awesome idea to sell your car (or return it to the leasing agent) and save your car/insurance payments for debt pay off or savings. The average cost of car insurance in America is $1426 per year or $118.63 per month. Think of what that can do to debt if applied!
But there are some reasons to carefully consider not getting rid of your second car.