Cost/Benefit Analysis: Living With and Without a Car

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Owning a car is as much a part of the American Dream as the spouse, kids, and house with a white picket fence. These are tangible signs of success, but life has a funny way of changing course. The new reality is portions of the populace are downsizing, budgeting, and looking for ways to make the most of their median annual household income (HMI), which the U.S. Census Bureau pegged at a $57,652 average from 2013 to 2017.

That isn’t a lot of money when, during the same time period, the average monthly mortgage was also $1,515. Concurrently, prices for new homes have risen nearly 17% since 2014. Renting offers some savings, but when utilities are factored in its still $982 a month.

If you’re thinking about adding a car to the mix, Kelley Blue Book analysts reported the average new-vehicle transaction price in November 2018 was $36,978 – a 2.1% year-over-year increase. And you know people aren’t paying for these shiny new toys with cash.

According to Experian Automotive, the average car loan is about $31,000, but 20% of applicants are borrowing for more than $50,000. What was the national HMI again? The numbers are surely intimidating.

Homeownership remains out of reach for many, leaving car ownership as the next most expensive purchase one can make. But with 58.3% of U.S. households earning annual salaries of less than $75,000, is owning a car – new or used – even worth it?

Short answer: It depends. Long answer: See below.

The Costs

Red and gray calculator
Unless you have a family chauffeur (hi, Dad), getting from point A to point B will always have a cost, regardless of your mode of transportation. (Pixabay)

Unlike a house, an automobile is, well, mobile. Yes, that is stating the obvious, but whatever investment you put into it (money, time, sweat), you really can take it with you.

But just like a home, there are daily costs to consider. Even if the vehicle is paid for, insurance, maintenance, and fuel are expected expenses while car washes and parking should be considered as well. The good news is that these costs fluctuate depending on your situation.

Take insurance, for example. The national annual premium is currently $942, or $78.50 per month. But if you live in North Dakota, Ohio, or North Carolina, your monthly bill would be $36, $42, or $43, respectively. On the other hand, residents of Louisiana are spending $152 while Michigan and Florida rank next at $133. However, any savvy spender will tell you that shopping around before your premium re-ups can net you some savings, and there are rarely penalties when switching carriers.

When calculating the averages of everything (i.e., vehicle loan, depreciation, insurance, maintenance, and fuel), a AAA study found the monthly average cost to own a vehicle to be $737. The study utilized data from 45 of the top-selling 2018 model-year vehicles if driven 15,000 miles annually. For scale, this all-inclusive monthly spend is $565 for a small sedan and ranges up to $851 for a pickup truck.

On the other hand, if public transportation is your jam, costs are variable there, too. And they usually go up. In 2017, the 30-day unlimited MetroCard in New York City increased from $116.50 to $121. Los Angeles residents pay a similar $122 for a TAP card. In non-subway metros like Detroit, a monthly bus pass will run about $70.

Care to rideshare? AAA says the average trip will cost you $13, while business travel reporting company Certify lists $22 between Uber and Lyft. Going old-school with a taxicab will cost more at approximately $30.

Even considering the lower average rideshare fare, if you use such a service for a once-a-week roundtrip, that’s $104 a month. Public transportation might cost another $100. There are cheaper alternatives like bike sharing and e-scooter rentals, but many of these services are regional and they don’t work so well if its raining or snowing. Also, if you need to travel farther, car rentals (and gas) become another expense.

The Challenges

Legs and feed hanging out back of a car
Many associate car ownership with freedom, which is a fair expectation, but being without a car offers its share of freedoms as well. (Pexels)

Strictly looking at numbers, there is no doubt that a mix of public transportation, ride-hailing, and car renting will cost, on average, less than purchasing a vehicle. But numbers are never the whole picture. Other factors to consider are location, availability, reliability, and quality of life.


White Chevy Tahoe in Snow
Weather and terrain undoubtedly come into play with regards to traveling by bus, train, shared rides (e.g., car, bike, scooters), or personal vehicle. (Pixabay)

Opting for the car-free life makes the most sense if you live and work in the city. You might even be able to forfeit the bus or rideshare and simply walk to the office, which benefits not only your bank account but also your health. Keep in mind, however, that what you might save in transportation dollars is inversely added to your urban cost of living.

Now if you happen to live just outside the city limits, you could find yourself taking a stroll anyway because bus and train stops generally become fewer and more spread out the farther away you travel. And should the weather outside be frightful, an Uber might make more sense than an umbrella.

You deal with no such issues when you have a car. Available in all shapes and sizes for streets paved and unpaved, a personal vehicle will go wherever you need it to go. They’re as all-terrain as you equip them to be. City commuters might prefer a battery electric vehicle due to a shorter drive; suburbanites can check out hybrids for fuel savings; and rural riders generally lean toward trucks or SUVs for capability.


People waiting for subway
Although available 24/7/365, public transportation and ride-share offerings can be limited during off-peak hours. (Unsplash)

Personal vehicles and public transportation options are both available 24 hours a day, seven days a week. Sort of. Your car is as available as you make it. Parked in the driveway or a garage or even at a friend’s house, you still have access to it any time. Trying to hop on a bus or subway after a late-night shift might not be as convenient – or as safe.

During the day, metro systems run frequently, sometimes as often as every 10 minutes during peak hours. Come nightfall, weekends, and holidays, those every-10-minute trains can be reduced to every 30 minutes or longer.

Scheduled services and construction also take place during off-peak hours, which can lead to longer waits, rerouted lines, and even shutdowns. The fallback plan will then be ridesharing, which is invariably less cost-effective and, depending on your location, not always available, especially at odd hours.


People run to catch a bus
On-time service is the goal of transportation companies, but 100% achievement is rare. However, no commuter is immune to delays and traffic. (Pixabay)

It’s probably safe to say that if you take care of your car, it’ll take care of you. Not so much for public transportation. You can be as diligent a rider as possible, always on time, respectful of other passengers, and never eat or drink when traveling, but interruptions will happen. Buses overheat, trains get stuck, or your Uber driver cancels the trip before your pick-up. I’ve experienced them all.

The inconvenience is only magnified as other passengers become impatient, the weather doesn’t cooperate, or you’re displaced far enough away from your destination that you have no option but to wait. In contrast, a car usually gives you a heads-up before ultimately breaking down. After all, that’s what those warning lights on the instrument cluster are for.

Of course, a major, unexpected repair not only means significant delay but you’ll be paying double while your vehicle is in the shop: all your typical car expenses plus any alternative ride options you take in the meantime.


Free delivery sign
Who needs a car when everything can be delivered right to your door? And for free! (Unsplash)

No-car and yes-car go head-to-head in this category, and much of it has to do with preference. When you don’t have a car to worry about, there is no stress in relation to parking, lines at the pump, or even shopping. Groceries, dining, household items – anything can be ordered online for home delivery these days.

And with services like Amazon Prime Now, realizing you’re down to the last roll of toilet paper is no cause for concern. You can receive a new pack within two hours. All for a price, of course, and keep in mind that free shipping is only “free” after hitting a minimum purchase amount (or paying for an annual membership or having a store-brand credit card, etc.).

If you have a car, you still have the convenience of online ordering but also the option of picking up said items in-store. And if something in your order is amiss, you can handle it with customer service on the spot.

Outside of shopping, there are pluses to vehicle ownership. If you have children or live with elderly family members, traveling with them via public transportation or ridesharing is not always ideal. Attending to your children’s multiple school and after-school activities might be less convenient with the bus. Requesting a wheelchair-accessible Uber or Lyft also will cost more than the standard economy ride.

Quality of Life

A family on vacation
Car ownership comes with a go-anywhere attitude, and the convenience of a personal vehicle extends to family and friends as well. (Pixabay)

Speaking of accessibility, although many cities are equipped with ADA-compliant buses, the below- and above-street level routes of a subway system sometimes are not.

Case in point: New York City. A report from the city’s own comptroller pointed out that only 24% of its 472 stations are accessible. That means 76% have no escalator or elevator in place for the nearly 640,000 residents who need assistance, which includes the mobility impaired, seniors, and young children.

Carrying a stroller, a toddler, and bags up and down several flights of stairs is no easy task, and even less so for those needing assistance from canes, crutches, and walkers – temporary or otherwise.

The Reality

Person holding a car key
Depending on your needs, wants, and expectations, car ownership is either a necessity or a luxury. (Pixabay)

Buying a new or used vehicle is not and should not be a hasty decision. There is much to factor in aside from the on-paper cost versus the cost savings. The variables of affordability are almost always in flux.

Consider that, per the U.S. Census Bureau, the average one-way commute is 26.4 minutes. If your commute time is less than that, and you are single, and you live in the city, and traveling means hopping on a plane, then owning a vehicle is probably a pricey and pointless endeavor. But if you do commute, have a young family, wanderlust closer to home, and prefer the peace of mind of 24/7 mobility at your beck and call, perhaps car ownership is for you.

Also, don’t forget that you can defray some of your car ownership costs by offering the vehicle for rent with a company like Getaround or Turo, serving those single urbanites who still sometimes require a traditional set of wheels.

In the end, what price do you give your time and peace of mind? Car ownership is indeed a personal choice, and whichever road you take should be the one you want to travel.

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