The One Car Expense To Drop in Retirement That Can Free Up Nearly $500+ a Month
Retirees are not feeling particularly optimistic about their prospects in 2026 and beyond. The 36th annual Employee Benefit Research Institute (EBRI) Retirement Confidence Survey found that just 64% of Americans feel secure that they’ll have enough money to last the rest of their lives, a notable drop from 2025.
Social Security’s uncertain future, the increasing cost of Medicare and the relentless pressure of rising prices are fueling the anxiety, and in response, retirees are looking to cut costs wherever they can. Fortunately for many, they won't have to look farther than their driveway or garage to find the financial security that feels so out of reach.
Find Out: 10 Hidden Auto Costs Your Dealer Might Never Tell You About
Try This: Start Growing Your Net Worth With Smarter Tracking
How Many Cars Is Too Many?
According to Western & Southern Financial Group, transportation is one of the three biggest expenses for retirees, behind only housing (no. 1) and healthcare (no. 2). On average, retirees spend nearly $800 a month just in costs related to getting around.
There’s much less room to maneuver with the top two than with transportation, and multi-vehicle owners are the rule, not the exception.
Kiplinger reports that U.S. households are most likely to have two cars, with 36.5% owning two, compared with 33.3% owning one and lower percentages owning none or three or more.
While that might be necessary and affordable when you’re working, ditching a spare ride in retirement could punch your ticket to future financial security.
The Cost of Owning a Second — or Any — Car
AAA Your Driving Costs reported that the average annual ownership cost of a new vehicle is $11,577, with major expenses including:
Depreciation: $4,344 per year
Financing: $1,131 per year
Fuel: $0.13 per mile
Insurance: $1,694 per year
License, taxes and registration: $813 per year
Maintenance, repairs and tires: $0.11 per mile
Depreciation, financing and insurance alone cost the average owner around $600 annually. While those figures are for new cars, Mercury Insurance notes that there are trade-offs that may or may not make buying used more affordable. While previously owned vehicles cost less upfront and depreciate more slowly, financing is typically more expensive while maintenance and repairs are more frequent (and more costly).
What’s More Important, an Extra Set of Wheels or a Secure Retirement?
The Kiplinger report found that more than four in 10 Americans get by with one car or none at all. If your lifestyle and location make public transportation a viable option, then a motor-free retirement will almost always be cheaper than owning a vehicle.
However, just selling a rarely used second car could bring a windfall today and stave off tomorrow’s substantial ownership costs, which will only get more expensive in time. For example, Kiplinger notes that U.S. tariff policy and global supply chain disruptions have already made common repairs more costly.
If you can’t or won’t part with your excess automobile, consider refinancing if interest rates fall or renting it using peer-to-peer rental apps like Turo to recoup costs.
To help Americans navigate the added cost of summer, MoneyLion is giving away $1,000 every day through July 4. Enter the Summer Break Giveaway here (No pur. nec. Ends 7/4/26. See Official Rules at mlion.info/summerbreakofficialrules)
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
More From MoneyLion: