Car or mortgage?

I have a couple of hours to kill while my car is in for its second service. This is a major service – as much as any service on a car is major these days – so includes all the filters as well as the oil change and a poke around with an old screwdriver, or whatever a “vehicle inspection” constitutes.

This has given me an opportunity to reflect on the car and what I have to do with it.

I collected the car on 17th January 2013. That’s 317 days ago. The mileage this morning was, give or take, 35,000 miles. Which is an average of 110 miles per day. Every day.

The computer in the car tells me that, despite most of my driving being done on the motorway, my average speed since my last refuel is just under 40 mph. I know from experience that this is typical for a driver like me. This means that I have, so far in this car, spent 875 hours driving. 34 1/2 days, 24 hours per day.

In a typical year, of 40,000 miles, it’s about 1,000 hours.

I have been averaging about 49 mpg, which is pretty good for a reasonably big, reasonably heavy car like mine. So, that’s 715 gallons of fuel, at a rough cost of £4,500.

This is insane. Basically, I drive all these miles so that I can afford to drive a car that allows me to drive all these miles in comfort and safety.

What I really should do is work out the saving I would make on my motoring costs if I moved closer to work. If I only had a 20 mile drive to the office, for example, I would be doing 200 miles per week commuting, not the 500 miles now. With personal mileage accounted for, I could probably save 50% on my miles. That’s £2,500 per year in fuel alone. £200 per month, let’s say. In addition, there is the saving for not having to buy the car of a 40,000 per year lease – that’s probably another couple of hundred quid. Then there’s insurance, tyres, and everything else.

Let’s call it £500 per month.

£500 per month might buy me an extra £50,000 mortgage over a 10 year term.

So, the big question is, “Could I buy a house that I would want to live in, 20 miles from the office, if I added £50,000 to my mortgage”

The answer has to be “Probably not” **

Of course, the alternative question is “Can I get a job 20 miles from home, that pays me £500 per month, after tax, less than I earn now”. And, “What would I do with all that extra life?”

These are much more difficult questions to answer.

M56 it is then.

** Edit: Just had a look on RightMove. The answer is actually “Maybe”, but it’s actually much more complicated, when second incomes are accounted for…

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