I Asked ChatGPT What Owning a Car in Retirement Really Costs — Here's the Number
Most retired people think of their car as something they have already paid for, rather than something that keeps costing money. According to ChatGPT, this is one of the most common and expensive mistakes people make when planning their retirement budget.
I asked the artificial intelligence to explain the real cost of owning a car in retirement, including all the expenses many people forget to count.
The Fixed Costs That Never Go Away
Insurance is the first and biggest regular expense. Even without driving to work every day, retirees in most parts of the country pay $120 to $250 a month for car insurance. Depending on the state and insurance company, rates may increase as people get older. ChatGPT called this the No. 1 fixed cost of owning a car in retirement. This expense does not go down just because the car spends more time parked in the driveway.
Car registration, fees and taxes add another $20 to $60 a month when the yearly total is divided into monthly amounts. Parking costs vary a lot. People in suburban and rural areas may pay nothing, while those in busy cities may pay $200 a month.
The Costs That Creep Up Over Time
Maintenance and repairs can make owning a car in retirement expensive in ways that are hard to predict. ChatGPT estimated these costs at an average of $100 to $250 a month over the year. It also explained that older cars, which many retirees own outright, often come with bigger and less predictable repair bills. One unexpected repair could cost more than the amount set aside for a whole month.
Gas costs $75 to $200 a month, even for retirees who do not drive much. Trips to medical appointments, shops and social activities can add up faster than people expect when they no longer drive to work every day.
The Cost Nobody Thinks About: Depreciation
ChatGPT said this is the cost that surprises retirees the most. Even after a car is fully paid off, it keeps losing value each year. Depending on the vehicle, that loss works out to about $150 to $300 a month. A car is an asset, but its value keeps falling. That loss is a real cost, even though the owner never writes a check to pay for it.
What the Full Picture Adds Up To
ChatGPT estimated that owning a car in retirement costs $500 to $1,200 a month, even when the owner has no car loan and drives very little. That comes to $6,000 to $14,000 a year. For many retirees, this is one of their three biggest expenses, after housing and healthcare.
This has a big effect on retirement savings. Under the 4% withdrawal rule, a retiree needs about $240,000 in savings to cover a car expense of $800 a month. Most retirees have never thought about their car in these terms.
The Cost-per-Trip Reality Check
ChatGPT suggested looking at the cost in a different way. Imagine a retiree who drives two to three times a week, or about 10 trips a month, and spends $800 a month to own a car. That works out to $80 per trip. In comparison, a typical Uber or Lyft ride costs $20 to $50 each way. A retiree who takes 10 rides through these services each month might spend $200 to $500 in total. That could cost less than owning a car, with no need to pay for insurance, maintenance or the car's loss in value.
When Owning a Car Still Makes Sense
ChatGPT said owning a car is clearly worth the cost for retirees who drive often, live in places with few other ways to get around, have health or mobility needs that make ride-sharing difficult, or greatly value their independence and the freedom to travel whenever they want.
The decision looks different for retirees who drive only a few times a week, live in places where they can easily walk or use public transportation, or are trying to make their retirement savings last longer.
Smarter Strategies for Retirees Who Want To Keep a Car
For retirees who want to keep a car, ChatGPT recommended choosing a dependable, less expensive used vehicle instead of buying a new one. It also suggested keeping the car for 10 to 15 years to spread out the cost and switching to one car per household if possible. For couples who currently own two cars, that last change alone could save $500 to $1,000 a month.
ChatGPT said the question every retiree should ask is not whether they can afford a car. It is whether spending $800 a month on a car is the best use of their fixed retirement income.
This article was provided by MoneyLion.com for information only. It should not be treated as financial, legal or tax advice. It was created with help from artificial intelligence and reviewed by the editorial team for accuracy. However, AI-generated content may be wrong, incomplete or out of date. Before making decisions based on this information, you should check important details with reliable sources.