This morning I went to pay my vehicle registration, which is thankfully low in Ohio. It’s about $60 per car — a blessing considering I used to pay several hundred in property taxes on each car in South Carolina.

Anyway, apparently you can pay up to five years at once on the car registrations, which drops the price from $60 per car to $55. So I saved $50, but I had to spend $550 up front. I like the discount, and the fact that I don’t have to worry about registering my cars until 2031. But the real question is: what am I losing in opportunity cost?

If I had only paid for this year, that would have been $120. Which means $430 could have been invested into the S&P 500. If we use the average 10% return rate — even drawing down $120 per year — we’d end up with roughly $136 extra by August 2031. Wow. I guess I really messed up paying in advance.

Saving $50 plus my 3% Robinhood Cash Back of $16.50 means I gave up $69.50 in total growth money because I took a 5-year discount. Now, is the 5 minutes saved every year to pay this going to make up for that? I doubt it.

BUT WAIT! What if I take that $69.50 that I saved and I put it in the S&P 500 right now, by August 2031, that would average out to $112, or $42 of growth. $112 isn’t as far behind $136. I’d still make better money putting a larger chunk into the market now rather than over time. So let’s do that and track it next year when I renew my wife’s car and the trailer. I can’t renew handicap plates more than 1 year at a time, and I want to buy the permanent plate for the trailer next year.

I guess we’ll see how this goes over the next year. Sometimes a discount isn’t worth it.

~~Miniwing~~
Investor, Stoic, Parent