Forget borrowing money to buy a car, the concept of owning a car itself is changing. Owning a car requires committing to a long list of expenses:
- car payment and value depreciation ($1,000+ a year)
- car insurance premium ($500+ a year)
- fuel costs ($600+ a year)
- government tax, registration, and fees ($300+ a year)
- maintenance and repair costs
- parking, traffic tickets, and tolls
In rough terms, owning a car runs at least $3,000 a year with most people spending more than $5,000 a year. Consumer Reports calculates the median at $9,000 a year over the first 5 years for new car buyers.
As a couple with two cars, I’ve been thinking about trying to get by with one car in the household. Even besides public transit, consider all the car-based options that may be available:
- Renting a car, but driving ourselves. (ZipCar, RelayRides)
- Being driven around by other people who rent or own cars. (taxis, Uber, Lyft)
- Being driven by autonomous robotic cars. (Google or major auto company)
After recent positive experiences with Uber and reading about the advancements in self-driving cars, I now believe that within the next 10 years we will shed at least one car. (I doubt I would want to go completely carless with two kids and all their activities.) Some food for thought on the subject:
- With Uber, Less Reason to Own a Car – Farhad Manjoo at NY Times.
“In many cities and even suburbs, it’s becoming much easier to organize your life car-free or car-lite,” said David A. King, an assistant professor of urban planning at Columbia University who studies technology and transportation. By car-lite, Dr. King means that instead of having one car for every driver, households can increasingly get by with owning just a single vehicle, thanks in part to tech-enabled services like Uber.
- A Financial Model Comparing Car Ownership with UberX (Los Angeles) – Kyle Hill at Medium.
So there you have it… for the average American who drives 13,476 miles per year, owning a motor vehicle will cost them $12,744 per year to maintain, and the cost of taking UberX everywhere will cost them $18,115 per year. However, Americans who drive less than 9,481 miles in a year should seriously consider ditching their car, because UberX will be cheaper.
- How Do Car Ownership Costs Compare to Uber? – Uber Blog.
The math doesn’t lie. In a city with with a fast, practical (and cool) alternative like Uber, it would very much be worth your time to crunch the numbers and see how much you’re really spending on your gas, parking, maintenance, etc. and how much time you spend doing those things. Because having your own personal driver pick you up in a slick car each and every day is a hell of an appealing alternative.
- Uber vs Car Ownership – Sam Altman.
Taking uberX everywhere is now cheaper for me than owning a car (I have an expensive car, so it’s not a super fair comparison, but I still think it’s interesting).
Of course “the math” depends on where you live and how you drive, but even small to medium cities will be affected. Uber now has UberFamily (car seats) and UberPool (multiple passengers heading the same direction). Now look at self-driving car technology. If I buy a self-driving car, that’s really just another convenience/luxury that costs me more money. But what happens when Uber and Lyft don’t have to pay drivers? (Robots taking jobs again!) Fares will drop even further.