The Netherlands is a small country with 17.4 million residents on 41543 square kilometers of space. That puts us in the Top 10 of population density in Europe. And even though we never have to travel very far to see our fellow Dutch friends we own 8.7 million cars, 7.6 million registered to individuals. Wow!
About 10% of car owners are below 30 years of age, and I want to congratulate all the young people who do not own a car, as they are in a way better position to grow their savings and become wealthier later on.
In general, the cost of owning and using a car is among the top expenses in any family budget, only triumphed by renting or paying the mortgage of a house and paying for groceries. While you often hear people complain about the high cost of a good meal or the insane price increases in energy, you hear much less about the actual liability in their budget: the car.
The real cost of a small medium class car is about €500 a month (in a later post I will lay out how I got to this number). Do not come up with all kinds of excuses and reasons why yours is much cheaper, because you are most likely lying to yourself and your wallet. Even without driving it, a car literally makes you burn money at an alarming rate.
If you buy new, your car will lose a lot of value in the first 3 years, so try to skip that part and buy quality second-hand. But even then you will have to save up for your next car already, pay taxes, maintenance and insurance (and this assumes you paid cash and did not take a loan to buy it).
Then when you actually start driving your beauty on wheels add more savings for your next car as you will need it sooner, pay for fuel, repairs and worse if you want to drive a bigger car add more of everything and then try to avoid parking and speeding tickets or else you burn your money faster than your fuel.
We own a car. We hardly use it anymore, so we do not really need an owned car (renting one would be an option). And in case we can not pay our way of living anymore I want the darn thing off my property. But let’s not fool ourselves: we and half of the Netherlands will keep complaining about everything and still keep that big liability sitting in front of our homes.
The car industry has sold us a dream of freedom, while their very products hold us back on becoming financially free. Think about that next time you visit a car dealer to feast on their brand new toys.