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Buying a car

Sometimes we may have to save for a while before we can afford expensive items. Buying a car is a common example. Finding 3000, for example, that you can spare in order to buy a car is almost impossible for many people so we stick to walking, bus and train rides.

Although buying a car may be a big expense it may well be a worthwhile purchase. For example, you may live in an area which doesn't have a very good transport system, you may work shifts and can't get a bus back home late at night, or you may have young children and find it difficult using public transport with prams and push chairs.

Activity: So how much would it cost to buy and run a car?
Below is an activity that compares the cost of public transport to the cost of a car.

You catch the train to go to work each day. The cost of the trip is 3.75 return.

Over a week your train fare will cost:
3.75 x 5 = 18.75

At the end of your train ride you then need to catch a bus to your workplace; this costs 80 pence.

Over a week your bus fare will cost:
80 pence x 2 (because you make two trips a day from and to the train station) = 1.60
1.60 x 5 = 8.00

The total cost of traveling to and from work is:
18.75 + 8.00 = 26.75

But what about other trips such as visiting relatives and buying groceries?

Visiting relatives:
£17.50 (for whole family) x 1 = 17.50
Shopping trips:
1.50 (return trip) x 2 (number of trips made per week) = 3.00

Total travel costs per week = 26.75 + 17.50 + 3 = 47.25
Total travel costs per year (approximately) = 52 x 47.25 = £2,457

So how much would your travel cost per year if you had a car? Some average figures might be:

Of course this does not take in to consideration how much your car might depreciate (that is how much money you might lose on your car) per year. This is also just the cost to run a car - you also need to buy the car!

If you do decide to buy a car you might set yourself a budget of 3,000. But, you may not have this amount of money available immediately. So what options might you have?

You could save 20 a week. But how long might this take to save?

3,000 20 = 150 weeks, which is nearly three years.

If you need a car, waiting three years might be a long time. Also the price of the car will probably have gone up!

Another option is to get a loan. You may decide to borrow 3,000 and look at options to pay back 20 a week. However, your loan re-payments would be longer than 3 years (more likely 5 years) because of the interest you would have to pay on top of the original amount borrowed.

Now let us look at your situation.
How much do you spend on travel per year?

Cost of getting to work
Bus/train fare x number of journeys per day = total cost of travel per day.

Total cost per day x number of days you travel to work per week = total cost per week.

Cost of visiting relatives
Bus/train fare x number of journeys per week = total cost of travel per week.

Cost of going shopping
Bus/train fare x number of journeys per week = total cost of travel per week.

Cost of other trips
Bus/train fare x number of journeys per week = total cost of travel per week.

Trips made by other people in your household
Bus/train fare x number of journeys per week = total cost of travel per week.

Add up the five totals = total cost of travel per week

Now compare this final figure with the cost of running and paying for a car:

Cost per week would be: 1410 52 =27.12 (approximately)

Add to this 20 to buy the car.

Your total cost of travel by car would be:
27.12 + 20 = 47.12 per week

Of course, your budget to buy a car could be increased or decreased depending on what you could afford to pay back when you look at your personal budget.

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