Should Sell Your Second Car in Retirement?
Shedding an extra vehicle is easier than you think — and it could save you thousands.
Selling one of two or more cars can be a smart way to save money, especially if you are retired or work from home. For two-car households where neither driver commutes to work anymore, it may be a no-brainer.
Almost 42% of American households have only one car or none at all, according to the U.S. Census. So, for a good portion of the country, having fewer vehicles is a viable option (when it's a choice). And there can be big benefits involved.
The upside of being car-free (or down one car) in retirement
The Bureau of Labor Statistics reports that as of 2024, transportation costs accounted for about 17% of household spending. Unloading a vehicle could free up loads of money in older people’s budgets, especially given the high cost of owning a car today.
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AAA reports that, on average, it costs almost $965 per month to own a new vehicle. And while it's not a given that you’re shelling out a similar amount each month — especially if you have a paid-off vehicle or an inexpensive car — you’re probably spending a decent chunk of money nonetheless on gas, registration fees, maintenance, and insurance.
Insurance savings
Drivers over age 74 tend to pay higher car insurance rates than most other age groups. Even if you only use your car occasionally, you may be paying a small fortune for auto insurance, which is yet another reason to consider dropping it. Here's the breakdown for those costs by age.
Age |
Annual cost of full coverage |
50 |
$2,421 |
55 |
$2,341 |
60 |
$2,312 |
65 |
$2,353 |
70 |
$2,498 |
75 |
$2,742 |
Parking time and cost
If you live in an area where you have to circle around for parking each time you take a drive, there may come a point when you decide you’re tired of that routine. For those who pay for parking, annual costs range from $240 in multi-family units to $55,000 for spots in upscale urban areas, such as Washington, DC.
Maintenance
It’s a good time not to worry about vehicle maintenance, given recently introduced tariff policies. As Craig Edmonds, President of asTech, explains, tariffs on imported vehicle parts, such as sensors, bumpers and other components, could drive up the cost of these parts. The result? Even routine collision repairs could cost more.
Moreover, some of the tools and equipment used to diagnose and calibrate modern vehicles properly also rely on imported components.
"Tariffs can raise those equipment costs, which may be passed down through repair costs," he says.
Used cars are commanding high prices
If you can part with one of your cars, you might get a great price for it. Invest those proceeds wisely, and you will have an asset likely to appreciate (unlike a car). Gauge your car's value with quotes from sites like Kelley Blue Book and Carvana.
Your health might improve
Without that extra car, you will likely walk or ride your bike more, depending on your area's walkability and how far you are from public transportation. According to the American Heart Association, getting just 500 more steps a day can lower heart disease risk in seniors by 17%.
Is it possible for you to give up a car?
There’s a difference between giving up a car in retirement and being a car-free household. If you’re a two-car household now, giving up one car and sharing the remaining one could be a reasonable compromise. You’ll save money while still having the convenience of a vehicle for errands and outings.
It depends on where you live
If money is tight and you live in a walkable area, or one with ample public transit, then going completely car-free could be an option. Many cities also offer discounted fares for older riders on public transportation.
This won’t work if you’re deep in suburbia or a rural area. It will also depend on the weather in your area; it's hard to walk or use public transit in a heat wave or snowstorm, especially if you're older.
The electric solution
More seniors are swapping cars for electric bikes or electric trikes (which are safer for riders with balance or mobility issues). Some municipalities allow electric golf carts or microcars.
Rideshares and short-term rentals can help
Of course, the more travel you can do on foot, the less you’re apt to spend. But even if you have to spring for the occasional rideshare, such as Uber or Lyft, you could still come out way ahead financially.
Let’s say owning a car costs you half of what the average new vehicle owner spends today, or roughly $500 per month. Even if a round-trip rideshare costs you $60, and you take one every week, you’re still ahead by the tune of more than $250 monthly, or $3,000 per year.
For frequent rideshare users, crunch the numbers on subscriptions like Uber One or Lyft Pink. You may wind up saving more overall.
For trips where you want to be behind the wheel, consider a short-term rental like Zipcar.
Retirement community solutions
Some independent living communities offer shuttle services, providing easy access to town centers and other off-site attractions. Others, such as The Villages, let residents own golf carts for use only in the community.
Snowbirds or frequent travelers
Finally, if you’re a retiree who splits time between two homes or travels a lot, that could make the case for unloading a car and falling back on alternative transportation during the periods when you’re home.
Is giving up a car desirable?
Giving up a car and the expense that comes with it in retirement may be doable, depending on where you live and what sort of shape you’re in. (If you struggle to walk long distances, you might need a car in the absence of being able to roam city streets.) But the question is, will it be a benefit — or an annoyance?
Before you sell a spare car, give it a trial run. Leave your extra car parked for a week or two and see whether you can manage without it.
There’s an element of freedom that’s sacrificed when you no longer have constant access to a car. And it may require a change in mindset and routine that you’re not eager or willing to embrace later in life.
It’s impossible to consider the day-to-day logistics of giving up a car and what your lifestyle might look like. Also, recognize that if you can afford a car in retirement, you may choose to prioritize comfort over savings, which is perfectly fine. It’s when money is notably tight that you may need to push yourself to get on board with alternative means of transportation.
All told, you may find that giving up a car means unloading a lot of your financial stress. And that may be worth some inconvenience.
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