Money Obedience

We bought a new car for our growing family almost two years ago. We looked at minivans (rejected by mom very quickly) and SUVs until we heard about the Mazda 5. It turns out that our budget planner was going to be also very happy.

So, this is what we found. You spend more than $40,000 to get an SUV, which then costs you a lot of money to drive around, too. As it turned out, most of the SUVs we looked at did not have a lot of space inside. So what am I paying for? Being able to run up steep mountains in treacherous conditions? How often do I have to do that? Never? Are SUVs safer than sedans or other cars? From what I know, as a group SUVs are not safer than sedans, for example. So what are we going to do?

I was lucky that a friend of mine told me about the Mazda5. I have never heard about this car before, but it turns out that the Mazda5 is a great alternative to a minivan or an SUV. It has six separate seats. Well, the third row is kind of small, but so are our kids. Our third child does not have to squeeze into a three-seat bench between two baby car-seats, which is probably a lot more uncomfortable than a tight third row. She can sit in the back by herself. (I get the feeling that a third row seat will be the favorite seat for either one of the kids in the future.)

All seats fold over separately. This allows for ample room to transport stuff. We can fit three kids and a double stroller on the space where the second seat of the third row is folded over.

Surprisingly enough the Mazda5 is also kind of sprightly, certainly a lot more so than a minivan. That made mom happy.

The car gets about 23-28 miles to the gallon. That is a good feature considering how much a gallon of gas costs these days. And it is priced below $20,000. That made dad happy!

We bought the car about two years ago and are still very happy with it.

How does this purchase affect my finances compared to getting an SUV for $40,000? I obviously saved $20,000 by getting a cheaper car. Let’s say I buy a car every ten years, which makes it four cars during my working years – probably more, but let’s stay with this example. Let’s further assume that I get 4% on my savings. After 40 years I will have accumulated almost $235,000 - if I spend $20,000 instead of $40,000 on a new car every ten years four times only! Not bad, even with pretty conservative assumptions, right?

I also save money on gas. If I pay $2.20 instead of $2.50 per gallon, if I get only 5 miles more per gallon with the smaller car, and if I drive 12,000 miles a year, I will have saved over $40,000 during the same 40 year period. That amounts to a total of approximately $275,000 in savings over 40 years. – Works for me!