Owning a car is expensive. Now that you’re retired, if you and your spouse no longer need two cars, you might be thinking about downsizing to one.
If so, you’re not alone, as approximately 10.7 million two-person households have just one vehicle, according to 2022 data — the most recent available information — from the U.S. Census Bureau. In comparison, only around 3.8 million households with four or more people have just one vehicle. This could suggest that retirees with grown children often downsize to one car.
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You might hesitate to bid your spare set of wheels goodbye, but doing so can amount to major savings. In 2024 — the most recent data available — transportation costs accounted for 17% of all monthly household expenses, according to the Bureau of Labor Statistics.
Keep reading to find out how much you can save by becoming a one-car household in retirement.
Here’s How Much It Costs To Own One Car vs. Two
Owning a car comes with a lot of expenses. For example, if you don’t own the car outright, the monthly payment can consume a notable portion of your retirement income.
As of the first quarter of 2026, the average monthly payment for a new car was $773 per month, according to Edmunds. Still pricey, the average monthly payment for a used car was $559 during this time period.
Insurance is another cost paid per car that adds up fast. For example, car insurance for drivers in the 65-to-74-year-old age range averages $96 per month, per Progressive.
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Overall, assuming the car is driven 15,000 miles per year, the average cost of ownership is $12,296 per year — as of 2024, the most recent available data — according to the Bureau of Transportation Statistics. This includes $8,541 in fixed costs and $3,755 in variable costs. Fuel, maintenance, tires, insurance, license, registration, taxes, depreciation and finance are included in this cost.
Of course, the total cost of car ownership varies for everyone. However, becoming a one-car household can save you a significant amount of money in retirement. Making the shift can free up extra funds to enjoy your golden years to the fullest.
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This article originally appeared on GOBankingRates.com: What Owning Two Cars in Retirement Really Costs vs. Downsizing to One
