Owning cars is a burdensome expense for some Rochester residents

Recent political forums have included discussions around the transportation challenges Rochester residents face when pursing employment opportunities outside the city.

A 2016 survey of residents in the Marketview Heights, Beachwood and EMMA neighborhoods on the city’s east side found that 31 percent of 599 respondents “think transportation is a major issue that people face in finding and keeping a job,” according to information provided by the city’s Office of Innovation.

Transportation is such a major issue because of the often exorbitant costs associated with buying and maintaining a vehicle, say those involved in local insurance and automobile organizations.

There are four main cost components to owning a car, explained Bera Jurado, a local State Farm insurance agent: down payment and financing; car operation and maintenance costs such as gas, oil, tires and brakes; unexpected major repairs; and auto insurance.

The overall cost of insurance depends on age, driving record, credit score, gender, number of drivers in a household, and discounts for multiple cars, good grades or being age 50 or older, Jurado said.

“Everybody affects everyone in a household,” said Jackie Ortiz, also a local State Farm insurance agent.

Expensive insurance premiums as well as ongoing maintenance for a used car can make vehicle ownership a financial burden, said Luis Sierra, a city resident who lives on Norton Street. On the other hand, he added, not having a vehicle costs time, with potentially long rides on a bus.

“With a car, you don’t have to worry about that,” he said about long travel times.

Sierra said that he cannot afford to purchase new vehicles and has always driven used ones to save money. However, he noted that his 2012 Ford Escape needs a costly repair in order for it to pass the required state inspection.

Those kinds of expenses can consume a disproportionately high share of a low-income person’s earnings, according to information from ReconnectRochester, a local transportation advocacy group. The costs associated with a modestly priced car can eat up to 25 percent of gross earnings for many city residents who earn $10 an hour, according to the group’s website (reconnectrochester.org). In Rochester, the average salary is $30,000 per household, according to U.S. Census data.

And the financing method one chooses also can affect interest rates and monthly payments as well, Jurado added. For example, monthly payments for a leased vehicle may be around $2o to $30 cheaper than monthly payments on an auto loan.

“The advantage to leasing is you don’t have to worry about major maintenance,” Jurado said, especially if at the end of the lease the vehicle is turned in for a new one, avoiding potentially costly repairs.

When financing a vehicle through an auto loan, choosing a longer-term loan may lower monthly payments, but in the end more money is spent on interest, he said.

“If the term is too long, like six to seven years, you run the risk of your loan outliving the car,” he added.

According to a recently released AAA study, the biggest and most often overlooked expense associated with purchasing a new vehicle is depreciation, which is a car’s decrease in value over time. New vehicles lose an average of $15,000 in value during the first five years of ownership, according to the annual study of driving costs (http://bit.ly/2vsngzd).

The AAA study also found that owning and operating a new vehicle in 2017 will cost a driver an average of $8,469 annually, or $706 each month, according to Lindsay Hawkins, a communication specialist with AAA Western and Central New York. The study noted that small sedans are the least expensive vehicles to drive, costing $6,354 annually.

Once a person has decided between buying or leasing, he or she needs to budget for such operating costs as fuel, oil changes, and tire and brake maintenance, Jurado said. And if a person opts to purchase a used car, major repairs can hit hard, sometimes reaching $2,000 for a single repair, he added.

Older vehicles may be less expensive to purchase and insure, but they also have a higher propensity for mechanical issues and breakdowns, Ortiz said.

“For many households I insure, there is only one vehicle and (breakdowns) could be a really big problem when it is out of commission,” she said.

For example, residents who can’t afford the repair may decide to park the car for a month and let the insurance lapse by skipping a payment, Ortiz explained. Unfortunately, the state Department of Motor Vehicles charges a person a daily fine for not maintaining insurance coverage on a registered vehicle, even if it is not in use, she added. Only one lapse in insurance coverage is allowed in a three-year period, Ortiz said, and a second lapse means a person must turn in the license plates for the vehicle and can no longer legally drive it.

The unintended consequences of such a decision can have a snowball effect, she said, not only financially but also in the potential loss of a job due to lack of transportation.

“It’s an awful Catch-22. My car doesn’t work, I can’t pay to fix it but I need to pay my insurance for a car I can’t drive,” she said. “It’s expensive to be poor.”

Copyright © 2024 Rochester Catholic Press Association, Inc. All rights reserved. Linking is encouraged, but republishing or redistributing, including by framing or similar means, without the publisher's prior written permission is prohibited.

No, Thanks