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The short answer
Dropping a second car removes its insurance, registration, depreciation, and most of its fuel and maintenance, all of which continue whether you drive it or not. What you add back are the replacements: an e-bike, some transit, occasional rideshare, and a few rentals a year. Enter both sides below and see the net.
Run your numbers
What dropping the second car saves
Annual figures. Use your real numbers wherever you can.
Second car costs you now
Per year, including the costs that continue when it sits still.
What replaces it
E-bike cost is spread over its life, so enter price divided by years you expect to keep it.
Net saving per year
$0
An estimate for comparison, not financial advice. Does not include the one-time proceeds from selling the car, which are a separate windfall.
Getting the inputs right
- Depreciation is the one people omit, and it is often the largest cost. A rough approach: estimate what the car is worth now and what it will be worth in a year. The gap is this year's depreciation. For an old car near the bottom of its curve this may genuinely be small.
- Use your real insurance figure, and call your insurer to ask what removing the vehicle actually saves. It is not always a simple division, since multi-car discounts can shift.
- Spread the e-bike over its life. A $1,750 setup kept for five years is $350 a year, which is what the default assumes.
- Be generous with the replacement costs. If the result still favours dropping the car after you have been pessimistic, you can trust it.
- The sale proceeds are a bonus, not an annual saving, so we deliberately leave them out of the yearly figure.
How to fill this in accurately
- Insurance: the annual premium for the car you would drop, not the household total.
- Depreciation: estimate what the car is worth now against a year ago. For most cars this is the single largest figure, and the one people leave out.
- Fuel: only the mileage that car does, not all household driving.
- Registration, tax and inspections: the annual total.
- Servicing and repairs: average the last two or three years rather than using the best year.
- Parking: permits, or the rent of a space, or a garage you could otherwise use or let.
Do not forget the replacement costs
An honest result subtracts what replaces the car. Enter these generously rather than optimistically:
- E-bike purchase, spread over a realistic life of several years
- Occasional car rental for holidays and large loads
- Taxi or rideshare for the awkward trips
- Transit fares or a season ticket
- Delivery charges for bulky shopping
If the answer is still strongly positive after generous replacement estimates, it is a robust result. If it is marginal, keep the car, because the coordination cost is real and worth something.
Why the answer is usually larger than expected
Because fixed costs dominate. Insurance, depreciation, registration and parking accrue whether the car moves or not, and a second car typically covers the fewest miles in the household, which makes its cost per mile the worst by a wide margin.
That is also why simply driving less saves far less than removing a car. We set that out in what going car-lite actually saves you, and the practical steps in going from two cars to one.
Frequently asked questions
What should I include when calculating second car costs?
Insurance, depreciation, registration and tax, servicing and repairs, fuel for that car only, and parking. Depreciation is usually the largest figure and the one most often omitted.
Why does dropping a car save so much more than driving less?
Because fixed costs dominate. Insurance, depreciation, registration and parking continue whether or not you drive. Driving less only reduces fuel, tyres and wear-based maintenance.
Should I subtract the cost of an e-bike from the savings?
Yes, along with rentals, taxis, transit fares and delivery charges. Spread the e-bike purchase over several years. If the result is still strongly positive after generous estimates, the conclusion is reliable.
How do I estimate depreciation on my second car?
Look up what the car is worth today against its value a year ago using a valuation guide. The difference is that year's depreciation, and for most cars it exceeds the annual fuel bill.