Guidelines for estimating transportation expenses when developing a budget as part of the divorce process

Developing a budget is a critical component of valuing the marital estate (what a couple owns minus what a couple owes = the marital estate) and dissolving the marriage. You and your divorce attorney should consider the following factors when estimating transportation expenses:

Auto Lease / Note Payment

Determining automobile costs should begin with the cost of securing the vehicle. These costs are usually represented by a lease payment or a payment made to a lending company. It is not unusual that a vehicle needs to be replaced during the course of a divorce. The replacement can be made a part of the budgeting process and will ultimately end up in the marital estate summary and division. It is also not unusual for a vehicle to be a standard of living issue. That is, while an individual may need a way to get around, he may not need a $75,000 Corvette to support his midlife crisis. The budget process may provide convincing evidence that an expensive vehicle cannot be supported under the circumstances, and a replacement is indicated. A smart divorce lawyer will point out the detrimental effects of owning luxury automobiles to individual budgets and perhaps suggest that if things go truly wrong, a court may be less than sympathetic on the issue.

Public Transportation

In lieu of private vehicle ownership, spouses often avail themselves of public transportation. This is true especially in urban areas where public transportation is readily available. If public transportation is readily available, and a spouse is regularly using it, the question might arise as to whether vehicle ownership is a luxury or a necessity.

Fuel

Budgeting for the cost of fuel may be difficult in periods of severely fluctuating costs. The best estimates of current and prospective costs are historical values. That is, costs for fuel can be determined by reference to credit and debit cards or checks. If the parties each have their own credit card that is used for fuel, this makes the determination of the costs of fuel for the prospective vehicles relatively simple. If the costs are combined and not distinguishable, then a ratio of the total costs is best used to estimate a split. For example, if the vehicles get similar gas mileage and are driven a similar number of miles then a 50/50 split might be appropriate. In other cases, the parties may know how many times they fill a vehicle per month and about what it costs. This type of estimate may be close enough for the budget process.

Maintenance / Repairs

Routine care of a vehicle usually includes oil changes, but the budget process also should consider replacement of components that routinely wear out such as tires, air filters, windshield wiper blades and others. Budgeting for the costs necessary to fix vehicles when they break is notoriously difficult. However, there are some general guidelines that may be useful. Repair costs for vehicles under warranty may be very small or non-existent. For cars out of warranty, the parties may consider that $50.00 to $100.00 per month may be adequate. Historical repair costs may give an indication of the costs that may be expected to keep a particular vehicle running. Catastrophic repairs, such as ruined engines or transmissions, may not be predictable and represent a real risk to the integrity of any budget.

Registration / Taxes

The cost of registration and the associated taxation of new vehicles may be significantly different (higher) than re-registering a vehicle. States often have “new use” types of assessments. After the first year, however, historical cost can normally be used to predict current and prospective costs. Usually, the costs are paid annually, which is converted to a monthly cost for budgeting purposes.

Insurance

Companies providing insurance for vehicles often provide discounts for multiple vehicles. Therefore, while the parties can use historical costs to predict current costs, costs after the divorce should be determined by contacting the insurance company to ask about single-vehicle coverage.

Other Vehicle Costs

Other necessary costs of transportation should be included in budgeted figures. For example, the costs of road tolls, parking, and ferries may be significant costs that should be included.

Children’s Vehicles

Parents with older children may be financing the operation of one or more vehicles for their children. In order to avoid future conflicts, the divorce process should indicate who is going to be responsible for these costs. The budget process of the responsible parent should include these costs and more or less duplicate the costs estimated for the parent’s transportation.