I had broached the topic four years ago when I was doing insurance planning. Today I wanted to share a personal example of seeing it in action.
5 years ago my wife felt a two wheeler is a complete solution to all her transportation needs. I believed a rental taxi is all I need. Esp. since I used a company provided cab for office commute, making the cost of insurance, servicing, depreciation & cost of capital alone would exceed the cost of a rental every weekend. In sort we were very happy with our transportation choice.
4 years ago after my marriage we immediately bought a car. That time it was more of a utility asset (rather than a luxury purchase). We bought one of the most affordable models and our selection criteria were width & acceleration. A light weight Suzuki Alto k-10 with a 1000cc 55bhp was ideal for zipping through the crowded lanes of Bangalore. However after driving 45,000km it became more of a member of a family rather than a means of transport.
Two years ago, when my daughter was born, we bought a second car. Since I worked in a distant part of the town; I needed a second set of wheels for my wife. My purpose was simple; working women with kids needed a dedicated car to manage both work and home. We settled for a sedan because my wife (now used to the comfort of a personal car) wanted larger leg room. Buying a nano/reva was unthinkable even though it might be more practical.
Currently she is planning to take a temporary break in employment to be a full time homemaker. Since I live in a posh locality with a playschool, hospital, shopping mall & all amenities in the walking distance, I suggested that we should be selling off the redundant car. This would also make economic sense because cars (even when they are not being used) depreciate rapidly and the insurance/servicing bills are considerable. So selling it off would align our expenses to the diminished earning capacity.
She was able to comprehend the rationale for the same and agreed that the car will be driven for hardly once a fortnight, but the very thought was appalling to her. Her car had become a symbol of independence, prestige and comfort at her disposal. Although I fully support my wife in her transition to be a full time home-maker, all I can think right now is: Our family’s financial goals remain the same, we don’t want to scale back on our lifestyle, the child has increased our obligations manifolds and yet our earning capacity has halved. Is the transition going to as smooth as we had anticipated?