Need for Speed 2

Last time, I talked about how vehicle ownership is not for everyone, and gave a sample calculation of its financial and other “costs”. Now, let us look at the transportation alternatives to buying a brand new car.

credit: beforeitsnews.com

Second Hand.

For some individuals, there is that stigma that owning “second hand” stuff connotes inferiority and a lack of class. Are there any practical merits to enduring this stigma?

I remember as a child, we used to ride either the “orange car” or the “green car”. These vehicles were eventually sold. Only later on did I realize that both were second hand vehicles. As my parents rose up the ranks in their respective careers, and were blessed with greater income, we finally enjoyed the “taste” of new vehicles. Over a span of time, dad bought three new vehicles but eventually sold two. The one left now is a 20 year old L300 versa van workhorse. The two that were sold were replaced with second hand vehicles.

Growing up, I was wondering why my dad, after experiencing “brand new”, chose to go back to “second hand”. Knowing that he was a practical mechanical engineer, the answer was probably cost. Now, please refer to the table below:

Actual price of different aged Toyota Vios for sale at http://www.olx.ph

Year Price % of 2014 Price Price Decrease from previous year
2014 727,000 100
2013 515,000 70.84 212,000
2012 470,000 64.65 45,000
2011 438,000 60.25 32,000
2010 395,000 54.33 43,000
2009 345,000 47.46 50,000
2008 290,000 39.89 55,000
2004  240,000  33% N/A

 

Observe that biggest price drop occurs during the first year. Then there comes a point where annual depreciation becomes relatively minimal. If you were to buy a 2013 model and sell it after 9 years, then you bought it at around 71% of the price, but will use it for 90% of the relative lifespan. There is of course, the risk of spending more on repairs over time, so you probably won’t want to keep a second hand car for longer than 10 years after its manufacturing date, unless you don’t mind going to the mechanic more than twice a year.

Non-driving alternatives.

Earlier this week, social media was flooded with complaints on metro manila traffic. Friends told of how EDSA has been turned into a giant parking lot, or how a 38-kilometer trip to the airport took longer than a Manila-Baguio night drive. Surely you can’t just leave your car and walk away, especially if you’re the one driving. Then there’s also the danger of running into gagamboys.

Two wheels

While some would attest that riding two wheels grants you greater mobility in traffic, risky maneuvers can also lead to accidents. My doctor friends say that they never run out of ER patients who got involved in motorcycle accidents. Also, being on two wheels means you need to protect yourself from the scorching sun, howling storms, or pouring rains. I’ve been riding my bicycle on relatively long distances on main throughfares, I think that as long as you follow traffic rules and are cautious, accidents will not chase after you.

Motorcycles

I don’t know how to drive motorcycles, but have been a “back ride” a couple of times. This is the vehicle of choice for most of those in the class C market, unless you count the big bikes which are just as expensive as entry level cars. A new motorcycle costs around 40,000 to 100,000. Fuel costs for the same distance is around 30-50% less.

E-bikes

These are basically electric powered two wheelers which may either resemble scooters, or bicycles. They can be operated via pedal power, or an electric motor. Costs can range from 10,000 to 60,000 pesos, and run on rechargeable lead-acid batteries. Cost per kilometer are lower than motorcycles, but top speeds are usually below 40kph. Battery charging generally limits the distance you can cover. Most low powered E-bikes don’t require an LTO driver’s license.

Bikes

I currently have a fixation with pedal-powered transport. An entry level bike can cost less than 3,000 pesos, and parts don’t have to be replaced often. Biking keeps you healthy, and sweaty at the same time. Parking consists of chaining it to any immovable inanimate object that can be close-hitched. Some downsides of course include the need to bring an extra shirt or set of clothes, and investing in blinkers and lights for night riding. The worst downside is that your distance is only limited by your stamina.

Public transport (Bus, Jeep, Tricycle, FX/UV Express, Occasional Taxi)

Enrique Penalosa, the former Mayor of Bogota City in Colombia, once said that “An advanced city is not a place where the poor move about in cars, rather it’s where even the rich use public transportation.” The Philippines’ public transport system has improved significantly in the last two decades, with transit systems and MMDAs’ reforms, but we sill have a long way to go to reach the state of having the rich use public transportation. Examples of places with good public transport are New York  and Bogota

Though I only learned to commute alone during high school, commuting eventually opened my horizons to travel greater distances at a fraction of a cost of driving. You can travel to Baguio city with less than the cost of a McDonald’s BFF meal. A two-way trip from my house to SM Megamall (around 24km) by bus during moderate traffic would cost around 40 pesos. Meanwhile the cost of travelling alone by car would be around 260 pesos (3.5L diesel, depreciation cost, parking fee). I would need 6 passengers to even out my costs.

While public transport can curb expenses by up to 80%, there would of course be flexibility limitations: having to walk, being at the mercy of the weather, being crammed in tight spaces, and having transport time constraints. On the other hand, you will not need parking space, and will not need to drive.

Walking

The normal person obviously walks a few thousand steps a day. The question is when to weigh walking from point A to point B, rather than taking another form of transportation. Under good weather conditions and back-bearable loads of less than 7kg, I would recommend walking distances less than 1 kilometer. Under bad traffic conditions, I would recommend walking until the points become decongested. Remember, during biblical times, people generally walked wherever they went.

Hybrid Alternatives

I know families who own bikes, motorcycles, and four wheeled vehicles. They use the appropriate method of transport when needed, and sometimes still ride public transport. This makes more sense if there is more than one driver in the family, as all modes of transport could be utilized simultaneously. I for one practice this one, as in our family, we can have as many as 6 license holders vying for our 3 running cars.

Summary:

  • Second hand cars offer most of the comforts of brand new ones, at a lower cost and less prestige.
  • Two wheels cost less, but are more limited in terms of reach, and may potentially be dangerous
  • Public transport is more affordable but may at times be less convenient
  • Walking is always an option
  • It’s best to utilize all modes of transportation available

 

Transportation has always been a big part of our human lives, consuming a good fraction of our time each day. Proper stewardship of time, resources, and self (ours and the world’s) is therefore needed.

 

Suggested Activity:

  • Why not spend some time and look at your transportation habits and spending?
  • Find out what is essentially important for you (safety, not being wet, getting to point B while still looking fresh, fastest travel time, cost constraints, etc.)
  • Try to look at your current modes of transportations, and frequency. List them down if you need to.
  • See if there is anything you need to change
  • Weigh the pros and cons
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This entry was posted in Lessons, life in general, Money Matters, Uncategorized and tagged , , , . Bookmark the permalink.

One Response to Need for Speed 2

  1. tsokgyusel says:

    Wow,how informative and comprehensive!

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