Sometimes we may have to save for
a while before we can afford expensive
items. Buying a car is a common example.
Finding £3000,
for example, that you can spare in
order to buy a car is almost impossible
for many people so we stick to walking,
bus and train
rides.

Although buying a car may be a big expense
it may well be a worthwhile purchase. For example, you may live
in an area which doesn't have a very good transport system,
you may work shifts and can't get a bus back home late at night,
or you may have young children and find it difficult using public
transport with prams and push chairs.

Activity: So how much would it cost to
buy and run a car? Below is an activity that compares the cost of public transport to
the cost of a car.

Bus/train You catch the train to go to work each day. The cost of the trip
is £3.75 return.

Over a week your train fare will cost:
£3.75 x 5 = £18.75

At the end of your train ride you then need to
catch a bus to your workplace; this costs 80 pence.

Over a week your bus fare will cost:
80 pence x 2 (because you make two trips a day from and to the train
station) = £1.60
£1.60 x 5 = £8.00

The total cost of traveling to and from
work is:
£18.75 + £8.00 = £26.75

But what about other trips such as visiting relatives
and buying groceries?

Visiting relatives:
£17.50 (for whole family) x 1 = £17.50

Shopping trips:
£1.50 (return trip) x 2 (number of trips made per week) = £3.00

Total travel costs per week =
£26.75 + £17.50 + £3 = £47.25 Total travel costs per year (approximately) = 52
x £47.25 = £2,457

So how much would your travel cost per year if
you had a car? Some average figures might be:

Of course this does not take in to consideration
how much your car might depreciate (that is how much money you might
lose on your car) per year. This is also just the cost to run a car
- you also need to buy the car!

If you do decide to buy a car you might set yourself
a budget of £3,000. But, you may not have this amount of money available
immediately. So what options might you have?

You could save £20 a week. But how long might this
take to save?

3,000 ÷ 20 = 150 weeks, which is nearly three
years.

If you need a car, waiting three years might
be a long time. Also the price of the car will probably have
gone up!

Another option is to get a loan. You may decide
to borrow £3,000 and look at options to pay back £20 a week. However,
your loan re-payments would be longer than 3 years (more likely 5
years) because of the interest you would have to pay on top of the
original amount borrowed.

Now let us look at your situation. How much do
you spend on travel per year?

Cost of getting to work
Bus/train fare x number of journeys per day = total cost of travel
per day.

Total cost per day x number of days you travel to work per week
= total cost per week.

Cost of visiting relatives
Bus/train fare x number of journeys per week = total cost of travel
per week.

Cost of going shopping
Bus/train fare x number of journeys per week = total cost of travel
per week.

Cost of other trips
Bus/train fare x number of journeys per week = total cost of travel
per week.

Trips made by other people in your household
Bus/train fare x number of journeys per week = total cost of travel
per week.

Add up the five totals = total cost of travel per
week

Now compare this final figure with the cost of
running and paying for a car:

Cost per week would be: £1410
÷ 52 =£27.12 (approximately)

Add to this £20 to buy the car.

Your total cost of travel by car would
be:
£27.12 + £20 = £47.12 per week

Of course, your budget to buy a car could be increased
or decreased depending on what you could afford to pay back when you
look at your personal budget.