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One car or two?

Published 11 September 2020

The struggle is real, and so are the petrol costs. So can you really afford a second car?

Houston, it seems we’re going to need a bigger parking lot.

According to the Australian Bureau of Statistics (ABS), our country is well on its way to having more cars than people by the 22nd century. Already, over 90% of the population have access to a car at home, and Australia’s rate of car ownership is growing faster than the actual population. 

But there comes a time in every family’s life where they begin to ask: is owning only one really enough?

Should you be adding to the impending ‘carmaggedon?’ When you’ve got kids to drop at school, or a long work commute, or heavy groceries to carry, do you really have an option? Or can one of you go completely car-free?

It depends on your household

For couples with lots of travel in their schedule, it can be hard to know whether buying a second car will be worth the expense. Sure, having another vehicle can be convenient. You get the benefit of fewer scheduling clashes, more independence, protection from the weather and the ability to accommodate more people and luggage - all of which can be worth the cost. (Also, how good is new car smell?)

But car ownership doesn’t come cheap. In fact, owning a car in Australia can cost up to $400 per week(!). Registration and insurance fees are pretty expensive, parking, tolls and fuel can really add up, and maintenance and services can be surprisingly pricey.

Zooming out, traffic and pollution rates are on the rise, and many people are feeling the pinch. So, how many cars does your household really need?

Is sharing really caring?

There are pros and cons to being a single-car family. Here are 5 questions to ask yourself before driving away in your new ride:

1. Is your schedule set in stone?

If you’re considering a second car to balance your family’s schedules, double-check whether a few calendar adjustments could help free up some time with your existing vehicle instead. Maybe you could work from home a few extra days a week, or walk instead of drive, or ask a friend for a lift once in a while.

2. Could a rideshare account be cheaper? 

Using a car is unavoidable sometimes, but that doesn’t mean you have to drive. For many Australians, using a rideshare or taxi service as and when you need it ends up cheaper than owning and operating the car yourself.

3. Would you consider a car-share instead?

With an abundance of cars per household in Australia, many affordable car-sharing platforms have arisen to help people make a little extra money from the cars they aren’t using every day. If you’re only going to need a car for a few days or weekends a month, consider hiring a car in your local neighbourhood instead of forking out for your own.

4. Is it for travel, or trend?

Buying a new car can be exciting, but are you buying it for fashion or for function? Before you make that final decision to buy, you need to look beyond your emotional connection to the vehicle. It can be a confronting question to ask, but if you’re cash-strapped and you don’t really need a second car for your daily travels, consider other low cost alternatives. It comes down to want vs need.

5. Can you choose second-hand?

If buying a car is your only option, consider buying a demo model or second-hand. That way, you’re saving some money, and your carbon footprint is a little lower. Also consider things like how you'll use the car, how many people you need to transport, what your budget is and your average fuel costs for the year.  Remember - there’s an art to buying second-hand, as you don’t want something that’s falling apart. But with enough research and digging, you could find yourself a real gem and save a lot of money.

Got two already?

Maybe it’s time to sell. If you’ve realised that one car is enough, use the money from your second car to either pay off some debt, top up your savings or splurge on other items you’ve been keeping on the backburner for too long.

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The information set out above is general in nature and has been prepared without taking into account your objectives, financial situation or needs.  Before acting on the information, you should consider whether the information is appropriate for you having regard to your objectives, financial situation and needs. By providing this information ANZ does not intend to provide any financial advice or other advice or recommendations.  You should seek independent financial, legal, tax and other relevant advice having regard to your particular circumstances.