I have a possible solution to the Social Security crisis: Buy and drive less expensive automobiles.
Actually, I got the idea from the American Institute for Economic Research, an independent think tank in Great Barrington, Mass., avowedly dedicated to the protection of the American taxpayer and consumer.
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AIER recently updated a popular study, "What Your Car Really Costs: How to Keep a Financially Safe Driving Record." This column recommends that you get a copy and study it, especially if you are a working stiff and first-time buyer of a new car or truck.
Making the right choice could save enough money to help you open one of those private/personal retirement accounts currently being debated among politicians as an alternative or an addition to the nation's Social Security system.
But first, a little bit about the study: For purposes of statistical and editorial convenience, it looks at the costs of owning and operating a single type of vehicle -- car or truck; small, large, or medium -- over a 50-year period in which it has been driven 750,000 miles. Of course, most U.S. car buyers purchase at least a dozen different vehicles in that period; and many own two or more vehicles at the same time. Also, some people drive an average 15,000 miles annually. Others drive considerably more.
No problem. The AIER study is not meant to tell you exactly how much you will spend on given kinds of vehicles. It is designed to give you an idea of those costs and how you might go about reducing them in the long term.
The study's philosophy is what I call "singletarianistic" -- that is, derived from the skinflint economic theories of Michelle Singletary, The Washington Post's resident guru on thrift. It's an every-penny-counts sort of thing.
For example, using 2002 dollar values and information from the Bureau of Labor Statistics, AIER estimates that the average cost of buying and operating a "standard-sized automobile" -- think of a Toyota Camry or Chevrolet Malibu -- over a 50-year, 750,000-mile driving lifetime is $250,000 -- a quarter of a million bucks.
"Americans spend more of their disposable incomes on automobiles than on virtually anything else except shelter," the AIER study says. The problem is that too many Americans spend that money with little regard for how those expenditures today will affect their chances for educational opportunities, good housing or adequate retirement incomes tomorrow.
The organization's automotive cost estimates includes loss of dollar value through vehicle depreciation; maintenance, gasoline and insurance expenses; and, as always, taxes and fees.
A small sedan, such as a Honda Civic, has an average ownership/operating cost of $240,704 over the same period and mileage range, according to AIER estimates. A "medium-sized" sedan, something on the order of a Ford Five Hundred, would cost $303,102 over that period.
The 50-year, 750,000 mile price goes to $349,968 for a large sedan, such as a Buick Park Avenue. Sport-utility models -- a Ford Explorer would be typical -- cost $320,506. Passenger vans, such as a Toyota Sienna or Chrysler Town & Country, could run up a $277,644 tab over the identical period and mileage range, the AIER study says.
There are many mitigating factors affecting those estimates -- not the least of which is the continuing argument in the automotive industry over what constitutes "small" or "medium" or "large." For that matter, there is growing disagreement over what is and isn't a car or a truck. And AIER makes no allowances in its report for the comparative costs of, say, the relatively higher purchase cost of a gasoline/electric hybrid vehicle versus the lower buying cost, but potentially higher operating expense (in terms of gasoline expenditures) for a car or truck with a traditional gasoline engine that uses more fuel.
The study's strong point is its embrace of common sense. For example, if you are on a limited income or otherwise living on a modest salary, it probably isn't very smart to go to a police auction looking for a cheap price on a BMW 5-series luxury sport sedan. Why? The purchase price is only one element of a vehicle's expense. It also costs money to insure, garage and maintain it; and those expenses tend to rise, sometimes astronomically, for high-end automobiles and trucks. There also is the matter of vehicle property taxes in jurisdictions that collect such levies. The "low" price you paid for your BMW is of little value to a tax assessor using standard, existing market values to figure out your tax bill.
Thus -- and again, especially for first-time buyers -- Chapter VIII of the study, "Insuring Your Vehicle," could be of particular importance.
There are lots of other useful nuggets in the AIER study, including advice on whether you should buy new or used, how to track and respond to vehicle safety recalls, how to choose a vehicle that retains the best resale value, and how to use state lemon laws if you happen to be the unfortunate soul who bought the one and only defective Toyota Corolla.
The study is available to you for $6. AIER is offering a money-back guarantee if you are not satisfied with the information contained therein. Interested parties should check out the nonprofit group's Web site at www.aier.org or write to the American Institute for Economic Research, 250 Division St., P.O. Box 1000, Great Barrington, Mass. 01230-1000.