Debt and Your Transportation Expenses

According to the Bureau of Labor Statistics, the average American spends 17% of his or her earnings on the transportation costs of owning a car. This is the second largest expenditure that we make, second only to the cost of owning or renting a place to live. In fact, the Bureau of Labor Statistics estimates that on average we spend about $700 a month to own a single car.

This is a huge sum of money that could be used to help you escape financial trouble. If you are able to make do without a car, this can be an easy way to gain back a substantial portion of your income. If you are struggling with mounting bills and wish to learn more about bankruptcy, call the New Orleans bankruptcy lawyers of Kervin & Young, LLC at 504-599-5906.

Totaling Your Cost

There are many hidden costs to owning a car of which you may not know. Typically when we think of the costs of owning a vehicle, 3 expenditures come to mind: our monthly car payments, gas, and insurance. However, there are many other costs involved in vehicle ownership that take a huge portion of our earnings away from us. The true sum of money spent on car ownership includes:

Cost of depreciation: As soon as you drive a car off of the lot, it immediately loses a large percentage of its value and continues to depreciate each year thereafter. A new $22,000 vehicle may be worth only $8,000-$10,000 after 5 years. This means that much of the money that you pay for your car is lost to depreciation.

• Interest on financing: Even with a low interest rate you may pay hundreds or even thousands of dollars in interest.
• Taxes and fees: Personal property or luxury tax
• Insurance: Monthly premiums
• Fuel costs: Gasoline and engine oil
• Maintenance: Regular inspections, oil changes, tire rotations, fluid flushes, etc.
• Repairs: Flat tires, engine malfunctions, worn belts, old brakes, etc.

Once you add up all of these expenses, you may find that you are spending much more on your vehicle than you expected. Rather than constantly putting money into a vehicle that loses value over time, you could save a large portion of your income to tackle debts, invest in retirement accounts, or save for a house. If you can adjust to a car-free lifestyle and find cheaper ways to commute, you will find that you can save thousands for a more secure financial future.

Contact Us

For sound legal advice and assistance regarding debt relief strategies, please contact the New Orleans debt negotiation attorneys of Kervin & Young, LLC today at 504-599-5906.